iRobot spends $72 million on air purification with Aeris acquisition
iRobot continues to expand through products unrelated to robotics. The company announced that it paid $72 million in cash to acquire Aeris Cleantec AG, a Swiss developer of air purifiers. iRobot will pay more for the acquisition if Aeris meets certain performance targets in 2022.
Two co-founders of Aeris and nearly 30 employees have already joined iRobot. The companies said Aeris will eventually move under the iRobot brand. Like iRobot, Aeris was founded in 2016 on technology developed at the Massachusetts Institute of Technology.
“Today's acquisition of Aeris is an important step in iRobot's strategy to expand our total addressable market and diversify our product portfolio in a way that gives consumers new ways to keep their homes clean and healthy. We are enthusiastic about the growth potential of Aeris products, especially given that the pandemic has raised consumer awareness of the importance of maintaining a cleaner and healthier home. We are also excited about the opportunity to use our Genius Home Intelligence platform and existing ecosystem of home robots to bring iRobot to air purification”
Air purification systems are in high demand due to the COVID-19 pandemic. According to Grand View Research, the global residential air purifier market is expected to grow from $3.4 billion in 2020 to more than $6.7 billion in 2027.
The acquisition also supports iRobot's push toward the smart home, which Angle has discussed for many years. iRobot said it plans to add new features and capabilities to Aeris products by integrating them with its existing ecosystem of home robots and the Genius Home Intelligence platform.
The Robot Report asked iRobot to clarify its plans for air purification products, but a company representative said iRobot cannot speculate about future products or technologies.
Could iRobot add air purification capabilities to its robot vacuums or charging docks, or add autonomous navigation to an air purifier? Possibly. But Angle told The Boston Globe that the Aeris acquisition is the "least robotic thing we have ever bought."
“We see enormous potential to expand the capabilities of artificial intelligence, home understanding and other relevant technologies that our Genius Home Intelligence platform uses for air purification. As we noted when announcing third-quarter results last month, we view Genius as a fundamental building block that will help us create a larger ecosystem as we enter new adjacent robot and smart home categories. By integrating elements of our Genius technology into the Aeris product portfolio, we hope to further expand our competitive differentiation in this category through air purification systems that will be unique in their intelligence and end features”
Aeris generated about $8 million in revenue in 2020, but the company said revenue will roughly double in 2021. Angle is optimistic about iRobot's future: "iRobot's annual air purification revenue will reach $150 million over the next several years, helping to improve our company's long-term profit profile."
Although Aeris is iRobot's first acquisition of this kind, it is not the company's first non-robotic product. Earlier in 2021, iRobot introduced the H1 portable vacuum. The device is designed to clean areas that are currently mostly inaccessible to robots, such as sofas, curtains and stairs.
Diversification is clearly an important part of iRobot's future strategy. Angle has spoken for years about iRobot's potential role in the smart home. The company's chairman told the Globe that iRobot is "exploring a range of products to make homes digitally connected beyond robot vacuums, and is considering possible acquisitions to expand iRobot across everything from security to energy efficiency and health."
Air purification has certainly been one of the major themes of the past two years due to the pandemic. Even before that, the category was thriving with products such as connected smart home filters. Aeris flagship products, the Aeris Lite and 3-in-1 Pro, offer a connected smartphone app for monitoring device status and managing multiple connected air purifiers.
The latter likely hints at iRobot's bigger plans. Without its own smart speaker, the company is almost certainly looking for some smart home device that could serve as a connectivity hub. Air purifiers could potentially fill that role at first. Perhaps in the future we will also see Aeris purification technology built into Roomba docking stations.
iRobot said the deal has already closed and the company has paid the full amount: "In addition to the initial cash consideration, the deal includes a modest earn-out payment based on performance if Aeris meets certain targets next year."
