Manus AI Raises Over $500 Million in First Funding Round Since Blocked Meta Acquisition

Manus, the high-profile artificial intelligence agent startup that Meta famously acquired for approximately $2 billion before Chinese regulatory intervention forced the social media giant to unwind the transaction, has successfully raised more than $500 million in fresh funding.

The startup’s parent company, Butterfly Effect, officially confirmed the massive capital injection in a WeChat post. The funding round was co-led by prominent venture and private equity firms Boyu Capital and IDG Capital. They were joined by a roster of existing high-profile backers, including tech conglomerate Tencent, HSG—the prominent investment firm formerly known as Sequoia China—and early-stage venture capital firm ZhenFund.

While Butterfly Effect did not disclose the specific valuation attached to this new funding round, Bloomberg had previously reported that the company was targeting a $500 million raise at a valuation of $4 billion. If realized, that figure represents roughly double the $2 billion price tag that Meta had originally agreed to pay for the startup. Furthermore, the company did not detail precisely how it intends to allocate the newly secured capital, noting only that it plans to continue aggressively hiring talent both within China and across international markets.

The Rise of Agentic AI and the Manus Phenomenon

Manus specializes in the development of autonomous AI agents—advanced software systems designed to go far beyond the conversational limits of standard chatbots. Rather than simply answering text prompts, Manus agents are engineered to take a broad user-defined goal and autonomously execute complex multi-step workflows, ranging from booking comprehensive travel itineraries to conducting deep financial and stock market analyses.

When Manus first burst onto the scene in March 2025, it was marketed as a formidable Chinese contender to OpenAI’s high-end, $200-a-month agent offerings. Initially launched on a strictly invitation-only basis, the software generated immediate and frantic consumer demand. Invite codes for the platform were reportedly listed on secondary Chinese resale marketplaces for as much as 10 million yuan, translating to over $1.3 million USD.

Under the hood, the startup leveraged foundational technology from major industry players, acknowledging that it utilized Anthropic’s Claude alongside fine-tuned versions of Alibaba’s Qwen models, combined with its own proprietary architectures. At the time of its debut, the concept of agentic AI was still emerging, positioning Manus as an early pioneer in a use case that mainstream technology behemoths were only beginning to explore.

Global Expansion, Rapid Revenue Growth, and the Meta Acquisition

As momentum built, Manus relocated its core team to Singapore around the middle of 2025. This strategic move involved shutting down the majority of its operations in China and resulted in the layoff of dozens of employees that July.

The strategy paid off rapidly in terms of commercial adoption. By December 2025—just eight months after its initial public launch—Manus crossed a major milestone by reaching $100 million in annual recurring revenue, reflecting the robust yearly total of its active subscriptions. Capitalizing on this explosive trajectory, Meta announced that same month that it had reached an agreement to acquire Manus for approximately $2 billion, aiming to integrate the startup into its broader vision for the next era of AI innovation.

However, the landscape for autonomous agents was shifting rapidly. During this same period, developer attention increasingly gravitated toward OpenClaw, an open-source agent framework capable of running locally on a user’s machine and executing commands through consumer messaging applications like WhatsApp and Telegram. OpenClaw went viral within weeks, rapidly amassing well over 100,000 GitHub stars. The momentum culminated when OpenAI hired OpenClaw’s creator, Peter Steinberger, to spearhead its own strategic push into the personal AI agent space.

Regulatory Intervention and the Unraveling of the Meta Deal

While Manus and Meta planned their integration, geopolitical and regulatory pressures were mounting in Beijing. In January, China’s Ministry of Commerce announced that it would closely review the high-profile acquisition. By March, Manus co-founders Xiao Hong and Ji Yichao had been summoned to Beijing and reportedly barred from leaving the country, according to reports by Reuters.

The regulatory hammer fell on April 27, when China’s top economic planning agency, the National Development and Reform Commission, officially ordered the acquisition to be unwound. The agency stated that it would prohibit foreign investment in Manus in strict accordance with national laws and regulations.

Faced with mounting regulatory roadblocks, Meta officially cut ties with the startup in June. By August, Manus announced that it would resume operations as a fully independent entity. To cleanly sever ties and separate its technical infrastructure from Meta’s systems, the company initiated a data purge, deleting specific user data that had been created on or after December 29, 2025.

Navigating a Changing Competitive Landscape

As Manus reasserts its independence, the competitive and regulatory environment has shifted significantly. Meta launched its own proprietary coding agent, Muse Code, in August 2025, entering a crowded market where critics viewed the social media giant as late to the fight against established alternatives like Codex and Claude Code.

Manus, meanwhile, continues to iterate on its product offerings. The company currently sells Cue, a specialized application designed to provide AI agents with dedicated phone numbers and digital wallets, featuring built-in safety controls that limit financial transactions to strict budgets predetermined by the user.

The trajectory of Manus unfolds against the backdrop of a broader tightening of regulatory oversight within China’s technology sector. In May, Beijing implemented stringent new travel restrictions, requiring senior artificial intelligence researchers and workers at leading private firms—including Alibaba and DeepSeek—to secure official government approval before traveling abroad. These measures coincide with a period where domestic Chinese AI capabilities are rapidly approaching a level of technological sophistication and commercial viability capable of competing head-to-head with major American firms on the global stage.