Manus, the high-profile AI agent startup that was briefly acquired by Meta for approximately $2 billion before Chinese regulatory intervention forced a reversal of the deal, has officially secured more than $500 million in fresh capital.
The significant financial injection was confirmed by the startup’s parent company, Butterfly Effect, via a formal announcement on WeChat. The funding round was co-led by prominent investment institutions Boyu Capital and IDG Capital. They were joined by a strong roster of existing backers, including tech giant Tencent, HSG (formerly known as Sequoia China), and ZhenFund, highlighting continued domestic confidence in the company’s long-term trajectory despite its recent geopolitical turbulence.
While Butterfly Effect did not publicly disclose the precise valuation attached to this new round, previous reporting by Bloomberg indicated that the startup was targeting a $500 million raise at a staggering $4 billion valuation. If accurate, this figure represents roughly double the financial valuation that Meta had agreed to pay for the company just months prior.
The company has not yet detailed specific plans regarding how the newly acquired capital will be deployed, noting only that it intends to continue expanding its talent pool through aggressive hiring both within China and across international markets.
The Rise of Agentic AI and the Phenomenal Launch of Manus
Manus operates in the cutting-edge sector of AI agents—advanced software systems designed to go far beyond traditional conversational chatbots. Rather than simply answering text prompts, these agents are engineered to take a high-level human goal and execute multi-step workflows autonomously, ranging from complex financial stock analyses to end-to-end travel booking.
When Manus first launched to the public in March 2025, it positioned itself as a formidable Chinese rival to OpenAI’s high-end $200-per-month agent tier. Operating initially as an exclusive, invitation-only platform, the startup immediately triggered a frenzy among tech enthusiasts and industry insiders. Demand for early access was so fierce that invite codes reportedly commanded prices as high as 10 million yuan—equivalent to more than $1.3 million—on secondary Chinese resale marketplaces.
Under the hood, Manus relied on a hybrid technical architecture. The company transparently acknowledged that it utilized Anthropic’s Claude alongside fine-tuned iterations of Alibaba’s proprietary Qwen models, which it integrated with its own foundational research. At the time of its debut, the concept of fully autonomous agentic workflows was still in its relative infancy, and Manus was among the early pioneers exploring practical enterprise and consumer use cases before global tech giants fully pivoted their development focus toward similar technologies.
As momentum built, the startup briefly relocated its core team to Singapore around the middle of 2025, scaling back a significant portion of its operational footprint inside mainland China and carrying out a round of layoffs that affected dozens of employees that July. Despite these organizational shifts, the commercial momentum proved undeniable. By December 2025—roughly eight months after its initial market introduction—Manus crossed a major financial milestone, hitting $100 million in annual recurring revenue driven by its subscription services.
The Blocked Meta Deal and Growing Regulatory Scrutiny
The startup’s rapid growth caught the attention of Silicon Valley. In December 2025, Meta announced an agreement to acquire Manus for approximately $2 billion, a move intended to anchor Meta’s ambitions in the next generation of conversational and autonomous computing.
However, the transaction soon collided with escalating geopolitical and regulatory pressures. While the deal was progressing, the broader artificial intelligence landscape continued to evolve at a breakneck pace. Attention across the developer community briefly shifted toward open-source alternatives like OpenClaw, an autonomous agent capable of running locally on a user’s hardware while receiving operational instructions via messaging platforms such as WhatsApp and Telegram. OpenClaw quickly achieved viral status, gathering more than 100,000 GitHub stars within weeks of its release, prompting OpenAI to hire its creator, Peter Steinberger, to spearhead its own personal agent initiatives.
Meanwhile, regulatory resistance was mounting in Beijing. In January, China’s Ministry of Commerce announced that it would closely review the proposed acquisition of Manus by an American multinational. By March, Manus co-founders Xiao Hong and Ji Yichao had been summoned to Beijing and barred from leaving the country, according to reports by Reuters.
The regulatory hammer fell on April 27, when China’s National Development and Reform Commission—the country’s premier economic planning agency—officially ordered the transaction to be unwound. The agency stated that it would prohibit foreign investment in Manus in accordance with existing national laws and regulations concerning sensitive technologies.
Meta officially severed ties with the startup in June. By August, Manus announced its formal return to independent operations. As part of the separation process, the company purged user data generated on or after December 29, 2025, to cleanly sever its infrastructure from Meta’s systems.
Navigating a Changing Competitive Landscape
Operating independently once again, Manus has continued to adapt its product lineup. While Meta launched its own coding agent, Muse Code, in August—entering a fiercely contested market alongside established tools like Claude Code and GitHub Codex—Manus has focused its commercial efforts elsewhere. The company currently markets Cue, a specialized consumer application that equips autonomous agents with dedicated phone numbers and digital wallets, allowing them to execute real-world transactions within strict budget parameters defined by the user.
The trajectory of Manus unfolds against a backdrop of tightening regulatory oversight within China’s domestic technology sector. In May, Beijing implemented new restrictions requiring senior artificial intelligence personnel at prominent private firms, including Alibaba and DeepSeek, to secure official governmental approval prior to traveling abroad. These measures reflect the growing strategic importance of Chinese AI research as domestic firms increasingly achieve technological parity with their American competitors.
Decentralized Applications (dApps)
Decentralized Applications (dApps)
Decentralized Applications (dApps)
