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

Manus, the high-profile AI agent startup that was briefly acquired by Meta for approximately $2 billion before regulatory intervention by Beijing forced the deal to unravel, has successfully secured more than $500 million in a fresh funding round.

The startup’s parent company, Butterfly Effect, officially confirmed the massive capital injection through a WeChat post. The funding round was co-led by prominent investment heavyweights Boyu Capital and IDG Capital, with continued participation from existing backers including Tencent, HSG—the venture capital firm formerly known as Sequoia China—and ZhenFund.

While the company did not specify the exact breakdown of how the newly acquired capital will be allocated, Butterfly Effect indicated that the funds will be directed toward ongoing talent acquisition, supporting expansion efforts both within China and across international markets. Although Butterfly Effect elected not to publicly disclose the exact valuation achieved in this latest round, a previous report by Bloomberg noted that the startup was targeting a $500 million raise at a staggering $4 billion valuation, a figure roughly double the $2 billion price tag Meta had agreed to pay for the company.

The Rise of Agentic AI and the Manus Phenomenon

Manus operates in the cutting-edge sector of AI agents—advanced software systems designed not merely to answer conversational queries like a standard chatbot, but to autonomously execute complex, multi-step goals on behalf of the user, ranging from booking intricate travel itineraries to performing comprehensive stock market analyses.

When Manus originally launched in March 2025, it positioned itself as a formidable Chinese competitor to OpenAI’s high-end, $200-per-month agent service, operating initially as an exclusive, invitation-only platform.

The market demand for early access was exceptionally intense. Invite codes for the platform were reportedly listed on Chinese digital resale marketplaces for astronomical sums, reaching as high as 10 million yuan, which translates to over $1.3 million. Beneath the surface, the startup acknowledged that its technical architecture leveraged Anthropic’s Claude alongside heavily fine-tuned versions of Alibaba’s Qwen models, combined with its own proprietary technology.

At the time of its debut, the concept of agentic AI was still relatively nascent in the broader tech landscape. Manus was actively experimenting with complex workflow automation long before major global AI behemoths shifted their primary development focus toward autonomous agents.

Rapid Growth Followed by International Expansion and a Blocked Mega-Deal

Following its viral launch, Manus experienced explosive commercial momentum. The company relocated its core team to Singapore around the middle of 2025, a move that involved winding down the majority of its operational footprint in China and implementing workforce reductions that affected dozens of employees in July of that year.

Despite the structural shift, the startup’s financial growth remained robust. By December 2025, roughly eight months after its initial market introduction, Manus successfully surpassed $100 million in annual recurring revenue, reflecting the strong yearly total generated by its subscription base. That very same month, tech giant Meta announced its intention to acquire Manus for approximately $2 billion, signaling a major strategic bet on the startup’s underlying technology for the next era of computing innovation.

Concurrently, the broader AI landscape experienced shifts in developer attention. Interest briefly surged toward OpenClaw, an open-source agent designed to run locally on individual machines while accepting commands through messaging applications like WhatsApp and Telegram. OpenClaw rapidly amassed well over 100,000 GitHub stars—a standard metric for developer interest and bookmarks—within weeks of going viral. This sudden surge culminated in OpenAI hiring OpenClaw’s creator, Peter Steinberger, to spearhead its own strategic push into personal AI agents.

Regulatory Intervention and Corporate Restructuring

The trajectory of the Meta-Manus acquisition shifted dramatically at the start of the year. In January, China’s commerce ministry announced that it would closely evaluate the multi-billion-dollar transaction. By March, Manus co-founders Xiao Hong and Ji Yichao were reportedly summoned to Beijing and restricted from leaving the country, according to reports by Reuters.

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

Meta officially severed ties with the startup in June. By August, Manus announced that it would resume operations as a completely independent entity. As part of the separation process, the company deleted specific user data created on or after December 29, 2025, to cleanly sever its technical infrastructure from Meta’s systems.

Following the breakup, Meta launched its own proprietary coding agent, Muse Code, in August, entering a competitive market where analysts observed it was arriving late to a battle already contested by established tools like Codex and Claude Code. Manus, meanwhile, has continued to develop its product ecosystem, currently offering Cue, a specialized application that provides individual AI agents with dedicated phone numbers and digital wallets, equipped with customizable spending limits set directly by the user.

The high-stakes saga surrounding Manus unfolds against a backdrop of increasing regulatory tightening within China’s domestic technology sector. In May, Chinese authorities instituted new travel restrictions requiring senior artificial intelligence researchers and workers at prominent private firms, including Alibaba and DeepSeek, to obtain official authorization before traveling abroad. The policy reflects Beijing’s growing sensitivity around domestic AI talent and technology as local capabilities approach a level of sophistication capable of competing directly with top-tier American tech companies.