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Amazon to buy Roomba maker for $1.7b as it cleans up in the smart home space
Your next Roomba may be an Amazon device. Here's why it makes sense.
➡️ The Shortcut Skinny
🤖 Cleaning up: Amazon to pay $1.7b to acquire Roomba maker iRobot
🧹 iRobot offers: Roomba vacuums with the best robot vacuum tech
🔈 Amazon offers: Alexa products with a big foothold in smart homes
🤼 Competition offers: increasingly cheaper Roomba alternatives. Time to sell
Amazon announced today that it’s going to buy Roomba maker iRobot for $1.7 billion, making it one of the biggest deals in the increasingly important smart home space.
The all-cash acquisition – $61 per share – still requires the approval of shareholders from iRobot as well as regulatory bodies. But shareholders are unlikely to balk – it’s one of the bigger purchases Amazon has done in the smart home category.
You can see that from the big moves Amazon has made over the last five years:
📷 Blink for $90m in 2017 (home security cameras)
🚪 Ring for ~$1.2b in 2018 (video doorbells)
📶 eero for $97m in 2019 (consumer-friendly routers)
🤖 iRobot for $1.7b in 2022 (leading robot vacuum maker)
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Why iRobot selling to Amazon makes sense
It’s a natural fit. Roombas are synonymous with robot vacuums and mops (there’s Roomba and then there’s everyone else), while Amazon has one of the two biggest footholds in consumers’ budding smart homes with its Alexa products (Google’s Android platform technically has Google Assistant on more devices).
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Amazon was always strangely missing a robot vacuum. It has doorbell cameras with Ring and security cameras around the home with Blink (although Ring and Blink have overlapped by expanding into each others’ primary categories). eero is one of the few big router brands that make the complicated process of connecting to WiFi a cinch.
The best that Amazon could do was offer discounts on some robot vacuums during its Prime Day deals marathon in July, but it never fully backed one brand over the other. That may change by the rumored Amazon Prime Fall event in October.
Time to sell
iRobot, meanwhile, has been seeing increasing competition from rivals trying to offer the Roomba-like tech for cheaper prices. The competition includes:
⚡eufy (owned by Anker)
🙃 Dozens of other brands we’ve never heard of before
What’s happening to Roomba over the last two years is what has happened to Philips Hue over the last six years. Hue lights have been the best in the smart home lighting business, but the products come at a high price. Cheaper knock-offs have flooded the market. In 2016, Philips spun off its lighting division, which is now called Signify.
There are similarities when you look what happened to Hue, but Roomba vacuums do have a little more room for innovation than smart lights. So does iRobot’s soon-to-be parent company. Amazon recently deployed invitations for Astro, its cute-looking household robot for home monitoring, which combines the powers of Alexa and Ring Protect Pro. It’s probably only a matter of time before we see something like Astro pulling more housekeeping duties.
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