Amazon’s $1.7 billion purchase of the company behind Roomba shows it is leaning into home robots after its first experiment, Astro, was met with mixed reviews

Roomba i7_Lifestyle_Living Room

Roomba, made by iRobot, has been on the market since 2002.iRobot

  • Amazon will buy Roomba maker iRobot for $61 per share, or about $1.7 billion.

  • Roomba saw a boom from the pandemic, but revenue has fallen 30% since last year.

  • The deal signals Amazon’s commitment to robotics following the launch of its home robot last year.

Amazon is betting big on robots with its latest acquisition.

The e-commerce giant announced Friday that it is buying iRobot — the company behind the Roomba — in an all-cash deal worth about $1.7 billion. It’s Amazon’s fourth-biggest deal after its $4 billion acquisition of healthcare provider One Medical last month.

The acquisition marks a major coup for iRobot: Shares in the company closed around $50 on Thursday and Amazon will pay $61 per share, a 22% premium.

Roomba received a pandemic boost as more people spend time at home matched by an increase in robot vacuum sales. But supply chain challenges and a drop in orders in recent months have taken a toll on iRobot’s bottom line: In its second-quarter results, published Friday, the company reported a 30% drop in revenue compared to 2021.

In an effort to cut costs, iRobot said Friday it will lay off 140 employees, or about 10% of its workforce.

While Amazon may get a deal on iRobot, it gets a popular home device and a wealth of home data collected over two decades. It’s a signal that Amazon is committed to robotics, despite mixed reviews for its own home robot, Astro.

Amazon has big plans for its little robot

Amazon Astro robot on the kitchen floor surrounded by people talking

Amazon unveiled Astro, an autonomous home robot, in September 2021.Amazon

When Amazon unveiled Astro in September 2021, it was billed as a home security companion that could navigate your house on its own.

But even Amazon insiders were divided over the $1,450 robot’s viability: Some employees told Insider at the time that Astro could eventually have the same mainstream success as the Amazon Echo, while others predicted it would fail spectacularly.

Early reviews of the Astro — which is still available by invitation only — highlighted the robot’s ability to learn around your room and keep an eye on your home, but noted that the robot mostly just got under your feet and wasn’t worth the hefty price tags .

The Wall Street Journal’s Joanna Stern noted, perhaps prophetically, that Astro would be more useful if it could also vacuum while whizzing around the house.

In fact, even before Astro was unveiled, Amazon had big plans for its little robot. An employee told Insider last September that the long-term goal for Astro is to make it “the ultimate personal assistant” that can carry things and complete household chores, such as vacuuming.

The ambitious goals for Astro may stem in part from the high stakes involved: Astro was Amazon founder Jeff Bezos’ passion project, and he was closely involved in the robot’s development before stepping down as CEO.

(In fact, Bezos’ own children apparently predicted the marriage of Amazon and iRobot back in 2018, when they built their own home robot by taping together an Echo and a Roomba.)

By acquiring iRobot, Amazon gets more than just another device to add to its robotics portfolio. Roomba has been on the market since 2002, meaning iRobot not only has a 20-year head start on home mapping and navigation, it also has two decades of customer data that could be very valuable to Amazon’s smart home goals. (An Amazon spokesperson told Insider that protecting customer data is “incredibly important” to the company.)

Now that Roomba is under Amazon’s umbrella, some of those ambitions may 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’s not going to be our last.”

Read the original article on Business Insider

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