Three failures in one week: what do iRobot, Luminar, and Rad Power Bikes have in common

In just eight days, three hardware giants have filed for bankruptcy. iRobot, known for its Roomba, Luminar, specialized in lidar sensors, and Rad Power Bikes in the e-bike sector, represent very different stories but share a common fate. Behind these three collapses emerge similar structural challenges: increasing tariff pressures, failed strategic acquisitions, and the inability to diversify beyond the products that made them famous.

Rad Power Bikes: From Peak to Losses

Rad Power Bikes was the silent giant in the electric bicycle market. Founded years ago, it enjoyed a solid reputation thanks to build quality, effective brand communication, and the ability to connect with customers in a sector dominated by unknown brands on online platforms. During the pandemic, micromobility experienced exponential growth, and Rad managed to ride the wave: in 2023, it generated revenues exceeding $120 million. Twelve months later, the figure had already dropped to around $100 million, plunging to $63 million during the fiscal year in which it declared insolvency.

The real fatal blow? A recall synonymous with financial disaster: battery issues that could have required a massive recall operation, incompatible with already struggling balance sheets. But the greater damage came from a tariff vulnerability that had already compromised margins.

Luminar: When the Future Doesn’t Arrive on Time

Luminar was born in the early 2010s with a clear ambition: democratize lidar technology. At the time, these sensors were expensive and bulky, reserved exclusively for aerospace and defense sectors. In 2017, the first big hype cycle around autonomous vehicles seemed to open windows of opportunity. Luminar indeed formed partnerships with Volvo, Mercedes-Benz, and other automotive industry players.

The problem: excessive dependence on a single trend. When enthusiasm for vehicle autonomy began to wane and implementation timelines lengthened, Luminar found itself without a Plan B.

iRobot: The Icon Turned Prison

iRobot is the most famous case: Roomba became synonymous with the robot vacuum category itself. But this strength also became a weakness. As technology advanced rapidly, iRobot remained trapped in the image of its historic product. It sought an exit through acquisition by Amazon, an operation that could have provided the necessary capital and diversification. The FTC blocked the deal, and iRobot lost its lifeline.

The Red Thread: Dependence on China and Tariffs

Among the three companies, a common fragility related to the structure of global trade emerges. iRobot, in particular, represents the macro dilemma of the hardware sector: building a localized supply chain in the United States over the past fifteen years would have been prohibitively expensive. Consequently, all three companies developed a structural vulnerability to tariff and geopolitical pressures. This factor, already evident during the Trump administration, proved crucial for startups and established companies in micromobility and robotics sectors.

The Narrative That Masks Reality

The dominant narrative attributes much of the blame to the Amazon acquisition block for iRobot, but this view omits the broader picture. Behind every failure are deep structural problems: lack of sustained innovation, inability to diversify, fragile business models in a context of unstable tariffs and vulnerable supply chains. iRobot didn’t fall because it lost Amazon; rather, it sought Amazon because it was already failing. Similarly, Rad Power Bikes didn’t fail because of a recall that signified misfortune; the recall was just the last domino to fall in a sequence already initiated by squeezed margins and unsustainable cost pressures.

These failures tell a deeper story: that of hardware companies that failed to manage the complexity of the modern market.