Within the span of roughly a single week, three companies that once symbolized distinct facets of modern hardware innovation—iRobot, Luminar, and Rad Power Bikes—each sought refuge through bankruptcy filings. At first glance, these organizations could not appear more different: one crafted robotic household helpers like the iconic Roomba; another specialized in highly precise lidar sensors designed primarily for autonomous vehicle systems; and the last became known for its line of electric bicycles that helped define the contemporary micromobility movement. Yet, as Sean O’Kane, Rebecca Bellan, and I discussed during a recent episode of the Equity podcast, beneath the surface of their individual stories lay a series of strikingly similar structural and strategic challenges. These included mounting tariff-related pressures, the collapse of critical partnerships and acquisition attempts, and a deeper issue of overreliance on the initial successes that once propelled them into the spotlight but ultimately limited their ability to evolve beyond that first wave of innovation.
The dialogue began with Sean offering a detailed examination of Rad Power Bikes. While the company occupied a leading position within the e-bike category—a sector still considered niche compared to the broader transportation market—it was also constrained by that very specialization. Founded years before the pandemic, Rad Power established a reputation for building durable, well-branded products that managed to capture consumer enthusiasm far more effectively than the numerous indistinguishable, off-brand electric bikes readily found on large e-commerce platforms like Amazon. During the pandemic years, the company benefited from a surge in interest in personal mobility; as people reduced in-person commuting and sought alternative means of getting around, sales skyrocketed. Yet traces of this boom-to-bust cycle became starkly visible in the company’s bankruptcy documents. These records reflect a dramatic decline: from an impressive $123 million in revenue in 2023, to about $100 million the following year, and finally only $63 million leading into the current filing period. Despite maintaining a diversified lineup of bicycle models, Rad Power never managed to consolidate or expand its foothold in a rapidly tightening and increasingly competitive market.
Similar dynamics, Sean noted, could be observed with Luminar. Founded in the early 2010s and emerging from stealth mode around 2017, Luminar’s mission was both ambitious and technically sophisticated. It sought to transform lidar—technology that, until then, had primarily served defense and aerospace purposes and was prohibitively expensive—into a commercially viable component for autonomous driving systems. Riding the enthusiasm of the first major wave of self-driving car hype, Luminar forged promising partnerships, securing deals with Volvo and later Mercedes-Benz, among others. Despite this initial momentum, the company’s business became overly dependent on these specific partnerships within a still-uncertain market for autonomous vehicles. As enthusiasm cooled and financial pressures mounted, that strategic concentration became a liability, culminating in Luminar’s recent collapse.
Then there was iRobot, by far the most recognizable of the three and a household name across much of the world. The company had successfully embedded itself in popular culture through its Roomba line of smart vacuum cleaners, products that many listeners of the podcast likely own or know firsthand. Yet this success also carried a cost. Over time, iRobot became synonymous with a single type of device, and as robotics and artificial intelligence technologies evolved at a blistering pace, the once ground-breaking product line began to appear dated. Seeking to reinvent itself and remain sustainable, iRobot attempted to pursue strategic alternatives—most notably, an acquisition by Amazon. However, that deal met resistance; the Federal Trade Commission ultimately blocked it, reflecting broader regulatory scrutiny toward major tech mergers. In the wake of that failed exit, the company found itself cornered, leading to the bankruptcy that now headlines its story.
Although these businesses occupied different industries, they converged upon similar issues: overdependence on early wins, vulnerabilities created by global supply chains and international trade tensions, and the challenges of scaling hardware operations in an economic climate increasingly unfriendly to capital-intensive enterprises. During the podcast, Sean turned to the specific case of iRobot to illustrate the broader trade dynamics at play. He questioned whether a company like iRobot could have ever flourished within the United States under the last fifteen years of manufacturing and labor conditions. The reality, he observed, was that iRobot’s reliance on Chinese production networks became almost unavoidable—and paradoxically, that same dependence likely enabled competitors abroad to replicate its innovations more swiftly and inexpensively. He recalled how the introduction of tariffs during the first Trump administration negatively affected numerous hardware startups, including those within the micromobility market such as Boosted Boards. For Rad Power Bikes, those same policies increased production costs and placed the company at a disadvantage long before the battery recall crisis struck—a crisis that, ultimately, proved fatal. The company faced an impossible calculus: issuing widespread recalls would deplete resources to the point of insolvency, yet failing to act eroded consumer confidence and regulatory compliance. Bankruptcy, in the end, rendered the debate moot.
Rebecca, sharing her own perspective, explained she personally never owned a Roomba—admitting the autonomous devices unsettled her—but she had purchased a Rad Power Bike as a gift for her mother, who adored it. That anecdote illustrated how even well-loved consumer hardware brands could struggle when unforeseen external pressures—supply chain disruptions, battery failures, and escalating tariffs—collided. She also raised questions about how antitrust decisions and trade restrictions shape these outcomes. Many online commentators, she noted, frame the FTC’s decision to block the Amazon-iRobot merger as government interference that sealed iRobot’s fate, while others suggest such intervention protects market competition from overconsolidation.
To this, Anthony added that corporate demise rarely results from a single decisive event. Instead, it typically unfolds through an accumulation of long-term structural weaknesses—strategic rigidity, dependence on volatile markets, and missed technological pivots—combined with the immediacy of one or two final triggers. In iRobot’s case, the collapsed Amazon acquisition became a convenient narrative focal point, a symbol of governmental overreach for some observers. Yet that narrative conveniently neglects the deeper reasons why the company sought a buyer in the first place: sustaining profitability amid declining margins, facing ever-cheaper imitators, and grappling with an inability to diversify beyond its flagship robotic line.
When taken together, the stories of these three companies sketch a sobering portrait of the modern hardware landscape. Whether one produces household robots, cutting-edge vehicle sensors, or electrified bicycles, the underlying pressures—tariffs, fragile supply networks, and the unrelenting need for adaptive reinvention—remain remarkably consistent. These bankruptcies serve less as isolated failures and more as cautionary reflections on the structural volatility inherent to twenty-first-century manufacturing and innovation-based entrepreneurship.
Sourse: https://techcrunch.com/2025/12/21/a-rough-week-for-hardware-companies/
