Amazon will acquire iRobot for $ 1.7 billion

This morning, Amazon and iRobot announced “a definitive merger agreement under which Amazon will acquire iRobot” for $ 1.7 billion. The announcement was a surprise, to put it mildly, and we barely had a chance to digest the news. But taking a look at what’s already known can still provide initial (if incomplete) answers as to why Amazon and iRobot want to partner and whether the merger seems like a good idea.

The press release, like most press releases about acquisitions of this nature, doesn’t include much in the way of detail. But here are some quotes:

“We know that saving time is important and housework requires valuable time that can be better spent doing something customers love,” said Dave Limp, SVP of Amazon Devices. “Over the course of many years, the iRobot team has demonstrated their ability to reinvent the way people clean with incredibly practical and imaginative products, from cleaning when and where customers want while avoiding common obstacles around the home, to automatic emptying. of the collection basket. Customers love iRobot products and I’m excited to work with the iRobot team to come up with ways that make customers’ lives easier and more fun. “

“Since starting iRobot, our team has had a mission to create innovative and practical products that simplify customer lives, leading to inventions such as Roomba and iRobot OS,” said Colin Angle, president and CEO of iRobot. “Amazon shares our passion for creating thoughtful innovations that empower people to do more at home, and I can’t think of a better place for our team to continue our mission. I am extremely excited to be part of Amazon and to see what we can build together for customers in the years to come. “

There isn’t much to do here, and iRobot has already referred us to Amazon PR, which, to be honest, feels like a bit of a punch in the stomach. I love (loved?) So many things about iRobot: their bizarre early story working on weird DARPA projects and even weirder toys, everything they’ve made with PackBot (and that too) and most importantly, the fact that they’ve made a successful company that builds useful and affordable robots for the home, which is just … it’s so hard to do that I don’t even know where to start. And no one knows what will happen to iRobot in the future. I’m sure iRobot and Amazon have all kinds of plans, promises and whatnot, but anyway, I’m nervous about iRobot’s future now.

Why this is a good move for Amazon is clear, but what’s exactly in it for iRobot?

It seems pretty obvious why Amazon wanted to get their hands on iRobot. Amazon has been working for years to integrate into homes, first with audio systems (Alexa), then video (Ring) and, more recently, some questionable home robots, like its home security drone and Astro. Amazon clearly needs help figuring out how to make home robots useful, and iRobot can probably provide some guidance, with its extraordinarily skilled team of highly experienced engineers. It goes without saying that iRobot is already well established in a huge number of homes, with brand recognition comparable to something like Velcro or Xerox, meaning people don’t have “robot vacuums”, they have Roombas.

All those Roombas in all those houses are also collecting an insane amount of data for iRobot. iRobot itself has been reasonably privacy sensitive about it, but it would be naive not to assume that Amazon sees a lot of potential to learn much, much more about what’s going on in our living rooms. This is more troubling, because Amazon has its own ideas about data privacy, and it’s unclear what it will mean for the increasingly camera-dependent Roombas in the future.

I understand why this is a good move for Amazon, but I have to admit I’m still trying to figure out what’s exactly inside iRobot, plus of course “$ 61 per share in an all-cash transaction worth around $ 1.7 trillion. . ” Which, to be fair, sounds like a lot of money. Usually when these kinds of mergers occur (and I’m looking back to Google acquiring all those robotics companies in 2013), the hypothetical appeal for the robotics company is that they suddenly have a lot of extra resources to spend on. exciting new projects along with a great support structure to help them succeed.

It is true that apparently iRobot has had some difficulty finding ways to innovate and grow, with their greatest potential new consumer product (the Terra mower) on hiatus since 2020. It could be that large sum of money, as well as not having to worry. so much of the growth as a publicly traded company, plus some new Amazon projects to work on might be reason enough for this acquisition.

My concern, however, is that iRobot will be completely engulfed by Amazon and will actually cease to exist in a significant and unique way. I hope the relationship between Amazon and iRobot is an exception to this historical trend. Furthermore, there is some precedent to this: Boston Dynamics, for example, has survived multiple acquisitions while keeping its technology and philosophy more or less independent and intact. It will be up to iRobot to act very aggressively to preserve itself and keeping Colin Angle as CEO is a good start.

We will be looking to track down more people to talk to about this in the coming weeks for a more nuanced and in-depth perspective. In the meantime, be sure to hug your Roomba – it has been a beautiful day for the little round robot vacuums.