Amazon will buy Roomba maker iRobot for $61 a share, or about $1.7 billion.
Roomba has seen a boom in the pandemic era, but revenue is down 30% from last year.
The deal signals Amazon’s commitment to robotics following the launch of its home robot last year.
Amazon is making a big bet on robots with its latest acquisition.
The e-commerce giant announced on Friday that it is buying iRobot — the company behind Roomba — in a cash deal valued at around $1.7 billion. It is Amazon’s fourth-largest deal after its $4 billion acquisition of healthcare provider One Medical last month.
The acquisition marks a major blow for iRobot: The company’s stock closed at around $50 on Thursday and Amazon will pay $61 a share, a 22% margin.
Roomba has had a pandemic boost as more people spending time at home equates to an increase in robotic vacuum sales. But supply chain challenges and a drop in orders in recent months have taken a toll on iRobot’s results: In its second-quarter earnings, released on Friday, the company reported a 30% decline in revenue from 2021.
In an effort to cut costs, iRobot said on Friday it would lay off 140 employees, or about 10% of its workforce.
While Amazon may be making a deal with iRobot, it’s gaining a popular home device and a wealth of home data collected over two decades. It’s a sign that Amazon is committed to robotics, despite mixed reviews for its own home robot, Astro.
Amazon has big plans for its little robot
When Amazon launched Astro in September 2021, it was advertised as a home security companion that could autonomously navigate your home.
But even Amazon experts were divided over the viability of the $1,450 robot: some employees told Insider at the time that the Astro could eventually succeed as well as the Amazon Echo, while others predicted it would fail spectacularly.
Early reviews of the Astro – which is still invite-only available – highlighted the robot’s ability to learn its way around your space and keep an eye on your home, but noted that the robot mostly got underfoot and wasn’t worth the exorbitant price tag. marking.
Joanna Stern of the Wall Street Journal noted, perhaps prophetically, that the Astro would be more useful if it could also vacuum as it roams around the house.
In fact, even before the Astro launch, Amazon had big plans for its little robot. An employee told Insider last September that Astro’s long-term goal is to make it “the ultimate personal assistant” that can carry things and complete household tasks like vacuuming.
The ambitious goals for Astro may stem, in part, from the high stakes: Astro was the passion project of Amazon founder Jeff Bezos, and he was intimately involved in developing the robot before stepping down as CEO.
(In fact, Bezos’ own children apparently predicted the marriage of Amazon and iRobot in 2018, when they built their own home robot by recording an Echo and a Roomba.)
By buying iRobot, Amazon is getting more than just another device to add to its robotics portfolio. Roomba has been on the market since 2002, which means that not only has iRobot had a 20-year head start in home mapping and navigation, it also has two decades of customer data that could be highly valuable to Amazon’s smart home goals. . (An Amazon spokesperson told Insider that protecting customer data is “incredibly important” to the company.)
Now that the Roomba is under Amazon’s umbrella, some of those ambitions could take shape.
Ken Washington, who leads the Astro team as Amazon’s vice president of consumer robotics, told GeekWire in an interview last month that the company is at “the beginning of the journey” when it comes to home robotics.
“Astro is our first consumer home robot,” he said. “It won’t be our last.”
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