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.

Sponsored

Advertise with Us

[email protected]

Sponsored

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.