Domino Effect: Why iRobot, Luminar, and Rad Power All Tumbled into Bankruptcy

Key Takeaways

In the span of about a week, three once-promising hardware companies—iRobot of Roomba fame, lidar-maker Luminar, and e-bike leader Rad Power Bikes—all filed for bankruptcy. While they operated in vastly different markets, they fell prey to a strikingly similar cocktail of challenges: major deals that fell through, crippling tariff pressures, and a failure to establish themselves beyond the one hit product that made them famous.

According to a discussion on TechCrunch's Equity podcast, these companies were very different but ran into a similar wall. Each was once thought of as an industry leader, but their foundations proved to be fragile.

A central theme is the one-product trap. iRobot became synonymous with robotic vacuums, but as the technology advanced, a flood of competitors—many leveraging the same Chinese supply chains—eroded its dominance. The company never successfully diversified beyond the Roomba.

Rad Power Bikes rode the pandemic's micromobility wave to great heights. Bankruptcy filings show a steep decline in revenue, from $123 million in 2023 to about $100 million last year, and only $63 million so far in 2025. Despite a diverse product lineup, it couldn't maintain its foothold as the market shifted. A costly battery recall, according to the podcast, was a "bigger dagger at the end."

Luminar, a company founded in the early 2010s, bet its future on making lidar sensors affordable for the autonomous vehicle market. It secured high-profile deals with Volvo and Mercedes-Benz, but the self-driving revolution has been much slower to arrive than anticipated, leaving Luminar heavily over-invested in a market that hasn't fully materialized.

Macroeconomic factors also played a significant role. Heavy reliance on Chinese manufacturing made all three companies vulnerable to tariff pressures. "Could you have ever built this company here in the United States with a localized supply chain over the last 15 years? Probably not," one of the podcast speakers noted, highlighting the double-edged sword of globalized supply chains.

For iRobot, the final blow was the collapse of its acquisition by Amazon, blocked by the FTC and EU regulators. There's a popular narrative that regulators killed the company. However, the podcast discussion pushes back, suggesting this view ignores the "larger structural issues" that made iRobot seek a buyer in the first place. The debate centers on whether regulatory action was the cause of death or simply the final event in a long decline.