Manus Raises Over $500M in First Round Since Meta Deal Collapsed

Manus parent company Butterfly Effect has raised more than $500 million, the Chinese AI lab announced Thursday in a WeChat post — its first funding round since Chinese regulators forced Meta to abandon a $2 billion acquisition of the startup in April.

Boyu Capital and IDG Capital led the round. Existing shareholders Tencent, HSG (formerly known as Sequoia China) and ZhenFund also participated. The company said it will continue hiring both in China and abroad.

The round confirms that Manus secured the amount it was reportedly seeking. Last month, the startup was said to be in talks with investors to raise $500 million at a $4 billion valuation. The company did not disclose a valuation in its announcement and did not respond to TechCrunch's questions on the figure.

The stakes here are considerable. Manus sits at the intersection of two tensions: Beijing's determination to keep leading AI talent and technology inside China, and Western tech giants' appetite for Chinese AI teams that have demonstrated product traction. The unraveling of the Meta deal in April made Manus a test case for how far Chinese authorities will go to block outbound AI transfers — and this funding round shows the company surviving, and capitalizing on, that intervention.

What happened between Manus and Meta?

The backstory moves fast. Manus went viral in 2025 following a demo of its AI agent. In mid-2025, the startup relocated its staff to Singapore. In December of that year, it announced a $2 billion acquisition deal with Meta — a deal struck while Manus was reportedly pulling in annual recurring revenue of over $100 million.

In April, Chinese authorities ordered the startup to unwind the transaction. The intervention came amid intensifying worries in China over losing AI talent and researchers to the West.

Manus resumed independent operations in August following the end of the Meta deal. As part of the split, the company said it was required to delete some user data.

According to the report, Manus is also considering going public in Hong Kong — a listing that would give the company a domestic exit path and, presumably, a warmer regulatory reception than a sale to a U.S. buyer.

What does Manus actually build?

Manus makes AI products and agents similar to what companies like Cursor, Lovable and Replit offer. Its product surface includes:

• A chatbot
• Vibe-coding tools that let users build apps and websites
• Tools for creating designs and presentations
• Video generation and other capabilities

That places Manus in one of the most crowded and best-funded categories in AI. Cursor, Lovable and Replit have all raised significant capital on the strength of AI-assisted development tools, and the competition for both users and engineering talent is intense. A $500 million war chest keeps Manus in that fight after a year in which its corporate future was, for months, entirely uncertain.

What's new in the product lineup?

The company recently launched Manus 2.0, which it says brings a new architecture with new products and capabilities built around a new harness.

It also introduced Cue, a standalone app that takes an unusual approach to personal AI agents. Cue gives each agent its own email address, phone number, digital wallet and computer. The app lets agents communicate, handle tasks across services, and make payments within limits set by the user.

Handing agents persistent identities and spending authority is a meaningful step beyond chatbots that merely answer questions. It also raises obvious questions about security and misuse — questions the funding announcement did not address. The user-set payment limits are the stated safeguard.

Why does the funding round matter beyond Manus?

Three reasons stand out.

First, the round demonstrates that Chinese capital will step in where Western buyers are blocked. When regulators killed the Meta acquisition, Manus lost a $2 billion exit. Boyu Capital, IDG Capital, Tencent, HSG and ZhenFund have now collectively replaced that outcome with growth capital and an implied path toward independence — potentially via a Hong Kong IPO.

Second, the round signals Beijing's broader posture on AI sovereignty. The April intervention was driven by concerns about AI talent and researchers leaving for the West, and regulators backed that concern with enforcement. Any foreign acquirer eyeing a Chinese AI startup now has to price in that regulatory risk.

Third, Manus enters this new phase with real commercial traction. Annual recurring revenue of over $100 million at the time of the Meta deal puts the company in a small group of AI startups with substantial paying demand for agentic products — and it did so before the split, meaning the revenue survived the disruption of an unwound acquisition, a staff relocation to Singapore, and mandatory user data deletion.

What comes next?

The immediate signals from the announcement are continued hiring at home and abroad, plus the reported exploration of a Hong Kong public listing. The undisclosed valuation leaves open the question of whether investors met the $4 billion figure from last month's talks — or whether the terms shifted after the regulatory turbulence of the past year.

With Manus 2.0 and Cue now in market, and a reported IPO under consideration, the company has shifted from acquisition target to independent competitor in a category where Cursor, Lovable and Replit are all racing to own AI-assisted building.