AI Startup Manus Raises Over $500 Million After China Unwound Meta's $2 Billion Acquisition
Key Takeaways
- •Manus secured over $500 million in new funding led by Boyu Capital and IDG Capital, marking its first raise since the Meta acquisition fell apart.
- •China's regulators, including the NDRC, compelled Meta's approximately $2 billion purchase of Manus to be withdrawn, with Meta formally cutting ties in June.
- •Manus generated $100 million in annual recurring revenue roughly eight months after its March 2025 launch, before relocating its team to Singapore.
- •Bloomberg reported Manus targeted a $500 million raise at a $4 billion valuation, about double Meta's agreed price, but the company has not confirmed final terms.
- •Manus now offers Cue, an app that equips AI agents with phone numbers and budget-capped digital wallets as it competes in the market for transacting agents.
Manus, the AI agent startup that Meta bought for roughly $2 billion before Chinese regulators forced the deal to be unwound, has raised more than $500 million in fresh funding.
Its parent company, Butterfly Effect, confirmed the round in a WeChat post. Boyu Capital and IDG Capital led the investment, with existing backers Tencent, HSG (the firm formerly known as Sequoia China) and ZhenFund participating. It is the company's first round since the Meta acquisition collapsed — a fresh vote of confidence in Manus as an independent company after its sale to Meta fell apart.
Butterfly Effect did not disclose a valuation or say how it plans to spend the capital, noting only that it intends to keep hiring in China and abroad. Bloomberg previously reported that the company was eyeing a $500 million raise at a $4 billion valuation — roughly double what Meta had agreed to pay. Whether the final terms matched that target remains unconfirmed.
An early mover in agentic AI
Manus builds AI agents — software that goes beyond answering questions like a chatbot by taking a goal and carrying it out on its own, from booking trips to analyzing stocks. When it launched in March 2025, it was positioned as a Chinese rival to OpenAI's $200-a-month agent, available by invitation only.
Demand was frantic: invite codes were reportedly listed on a Chinese resale marketplace for as much as 10 million yuan, more than $1.3 million. The company acknowledged that, under the hood, it relied on Anthropic's Claude and fine-tuned versions of Alibaba's Qwen models alongside its own technology. At the time, agentic AI was not yet a major focus for the industry's biggest players, and Manus was experimenting with the use case before the AI behemoths began working on it.
Manus relocated its team to Singapore around mid-2025, shutting most of its China operations and laying off dozens of employees in July. By December it had reached $100 million in annual recurring revenue — the yearly total of its subscriptions — about eight months after launch. Meta announced its roughly $2 billion purchase that same month, and Manus publicly announced it was joining Meta.
Beijing intervenes
China's commerce ministry said in January that 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, per Reuters. On April 27, the National Development and Reform Commission, China's top economic planning agency, ordered the deal withdrawn and said it would "prohibit foreign investment in Manus in accordance with laws and regulations." The sequence — a ministry review, travel bans on the founders, then a withdrawal order — traced the escalating steps Beijing took to unwind a completed acquisition of a Chinese AI startup by a foreign buyer.
Meta cut ties in June. In August, Manus announced it would operate independently again, deleting some user data created on or after December 29, 2025, to separate its systems from Meta's.
Attention in the agent space, meanwhile, drifted to OpenClaw, an open-source agent that runs on a user's own machine and takes orders through apps like WhatsApp and Telegram. OpenClaw collected well over 100,000 GitHub stars — developer bookmarks — within weeks of going viral. OpenAI then hired OpenClaw's creator, Peter Steinberger, to lead its push into personal agents.
Meta's own coding agent, Muse Code, launched that same August into a market where it felt late to the fight against Codex and Claude Code. Manus, for its part, now sells Cue, an app that gives agents their own phone numbers and digital wallets, with payments limited to a budget the user sets — part of a broader race to build agents that act and transact rather than simply chat.
A wider tightening in Beijing
The Manus case sits inside a broader regulatory shift: in May, China required some senior AI workers at private firms, including Alibaba and DeepSeek, to get approval before traveling abroad, as Chinese AI approaches levels of quality and relevance that can compete head to head against American companies.
Source: Decrypt
