🎯 Roomba maker is collapsing fast

Welcome back to another issue of Trendline! Let’s dive in to today’s post 👇️ 

1) iRobot (maker of Roomba) is on the verge of bankruptcy: I love my Roomba! It has been a loyal little cleaning robot for the last 5 years. But as we know, a great product doesn’t always make a great business.

iRobot was a robotics pioneer. Founded in 1990 by MIT engineers, it brought the first truly successful home robot to market. The Roomba became a global hit, selling over 50 million units and defining a category.

But the business has struggled in recent years. Revenue has declined by 56% in the last 3 years. The company’s gross margins are abysmal (~20%) even by hardware company standards and market has become highly competitive.

The company tried to sell to Amazon back in 2022 for $1.4 billion but EU regulators blocked the deal. Its market cap is now only $95 million! Last month, the company has declared recently that its on the verge of bankruptcy.

A brutal fall for the original home robotics success story.

2) SUVs rule American roads: Sedans use to rule American roads. Now its SUVs (Sports Utility Vehicles). In 2013, more than half the cars produced in US were Sedans/Wagons. In 2023, this number has reduced to only 23%. SUVs on the other hand now account for ~60% of all Light Duty Vehicles produced in US every year!

Car companies find it more profitable to sell SUVs. So much so that Ford has completely stopped making Sedans.

3) World’s top economies are getting older: Globally, increasing life expectancy and declining birth rates are making these societies grow older. In Japan, births fell to a record low in 2023 (the eight straight year of decline).

This isn’t good news. And we see this is happening across all developed countries. The resulting demographic imbalance (as shown in the chart) can strain economies - overburdening healthcare, altering fiscal policies and putting those working under high pressure.