Manus $500 Million Funding Follows Collapse of Meta Deal

The Manus $500 million funding round, confirmed on Thursday, October 8, 2026, is the AI agent developer's first raise since China forced Meta to abandon its roughly $2 billion acquisition of the startup. Manus parent Butterfly Effect said in a WeChat post that it raised more than $500 million, with Boyu Capital and IDG Capital leading and existing shareholders Tencent, HSG and ZhenFund participating, TechCrunch reported.

What happened

Butterfly Effect did not disclose a valuation or say how it will use the money, beyond plans to keep hiring in China and abroad. Last month, the company was reported to be in talks to raise $500 million at a $4 billion valuation, TechCrunch said; Decrypt attributed that earlier report to Bloomberg and noted it would be roughly double what Meta agreed to pay. HSG is the firm formerly known as Sequoia China.

The round closes a turbulent chapter. Manus launched its agent in March 2025 and moved staff to Singapore around mid-2025, shutting most of its China operations, according to Decrypt. By December it had reached $100 million in annual recurring revenue, about eight months after launch, and Meta announced that month it would buy the company. China's commerce ministry said in January it would assess the deal; by March, co-founders Xiao Hong and Ji Yichao had been summoned to Beijing and barred from leaving the country, Decrypt reported, citing Reuters. On April 27, China's National Development and Reform Commission ordered the deal withdrawn and said it would prohibit foreign investment in Manus.

Meta cut ties in June. In August, Manus announced it would operate independently again and deleted some user data created on or after December 29, 2025, to separate its systems from Meta's, Decrypt said.

Why it matters

The Manus $500 million funding round shows that Chinese capital is willing to back a high-profile AI company after Beijing blocked a U.S. buyer. TechCrunch said Chinese authorities acted amid intensifying worries about losing AI talent and researchers to the West. Decrypt placed the case within a wider tightening: in May, China required some senior AI workers at private firms, including Alibaba and DeepSeek, to obtain approval before traveling abroad.

Manus's products sit in one of the most contested areas of AI. Agents take a goal and carry it out, rather than simply answering questions. Manus recently launched Manus 2.0, which it says brings a new architecture built around a new harness, and introduced Cue, a standalone app that gives personal AI agents their own email addresses, phone numbers, digital wallets and computers, with payments limited to budgets users set, TechCrunch reported. Decrypt noted that Manus has acknowledged using Anthropic's Claude and fine-tuned versions of Alibaba's Qwen models alongside its own.

Manus was early to the category. When it launched by invitation only, invite codes were reportedly listed on a Chinese resale marketplace for as much as 10 million yuan, more than $1.3 million, Decrypt said. Attention later shifted to OpenClaw, an open-source agent that collected well over 100,000 GitHub stars within weeks of going viral; OpenAI then hired its creator, Peter Steinberger, to lead its push into personal agents. Meta's own coding agent, Muse Code, launched in August. Against that backdrop, the Manus $500 million funding round gives the company fresh resources to compete as an independent player.

Competition is intense. Google has begun giving its Gemini agents their own work accounts, as we covered in Google Cloud Gemini agent, and investors are scrutinizing the revenue behind AI valuations after reports on OpenAI, covered in OpenAI $50 billion revenue.

What's next

Manus is reported to be considering a public listing in Hong Kong, TechCrunch said. A listing there would give its Chinese backers a domestic exit route that does not depend on a foreign acquirer, a path the Meta episode showed can be closed by regulators. The size of the new round and the absence of a disclosed valuation leave open how investors are pricing the company after the Meta split. The key tests ahead are whether Manus can grow revenue from its agent products while operating under Chinese restrictions on foreign investment, and whether its Cue app gains traction against larger rivals. Manus did not respond to TechCrunch's questions about its valuation. This article is for information only and is not investment advice.