Manus, the Chinese startup, secures more than $500M in its first fundraising round after separating from Meta

Title: Butterfly Effect Raises $500 Million After Meta Deal Collapse

Meta description: Butterfly Effect raises more than $500 million after Meta's $2 billion Manus acquisition was unwound, as the Chinese AI startup rebuilds independently.

Tags: Manus, Butterfly Effect, Meta, AI funding, China AI

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Butterfly Effect, the parent of Chinese AI lab Manus, said in a WeChat post on Thursday that it has raised more than $500 million in its first funding round since Meta was forced to call off its $2 billion acquisition of Manus. The Manus $500 million funding round puts new capital behind a startup that has spent the past year moving from viral AI-agent attention to a cross-border regulatory fight, a Singapore relocation, and a restart as an independent operator. For readers, the raise is a test of whether Manus can grow without Meta's backing while still hiring, shipping products, and possibly pursuing a listing in Hong Kong.

Background: Viral AI Agent, Singapore Move, and Meta Deal

Manus became one of the most closely watched AI startups in China after a demo of its AI agent went viral last year. The product is a general-purpose AI agent that can autonomously carry out tasks such as browsing the web, running code, and using Cursor integration for vibe coding. That framing matters because Manus was not only selling a chatbot: it was pitching a system that can act across tools, a category that draws both developer interest and regulatory scrutiny.

By mid-2025, Manus had relocated its staff to Singapore. At the time, the startup was said to be pulling in annual recurring revenue of over $100 million. In December, it announced a $2 billion acquisition deal with Meta. The transaction turned Manus into a rare case study: a Chinese AI company with global product ambitions, a Singapore-based team, and a buyer in Meta. It also placed the startup near the center of a larger debate about AI talent, research capacity, and national control over strategic technology assets.

Collapse: China Order, Data Deletion, and Independent Restart

The deal did not survive. In April, Chinese authorities ordered the AI startup to unwind the Meta acquisition amid intensifying worries in China over losing AI talent and researchers to the West. That order changed the company's path: Meta's planned purchase could not close, and Manus had to return to independent operations. In August, Manus said it resumed independent operations following the end of the Meta deal. The company also said it was required to delete some user data as part of the split.

For users, the data-deletion detail is important. It shows that a corporate breakup can reach beyond ownership and into product infrastructure, privacy, and continuity. For investors, it raises a practical question: how much growth can be restored after a forced unwind, especially when the company had already built revenue momentum and international distribution. The reported $100 million-plus annual recurring revenue made the collapse more consequential, not merely symbolic.

Latest: $500 Million Round, Undisclosed Valuation, and IPO Talk

Boyu Capital and IDG Capital led the new round, and existing shareholders Tencent, HSG, formerly known as Sequoia China, ZhenFund, and others participated. Manus said it will continue hiring both at home and abroad. The company did not disclose its valuation. Manus did not respond to TechCrunch's questions about valuation. Last month, it was said to be in talks with investors to raise $500 million at a $4 billion valuation. The reported figure gives readers a benchmark, but the company has not confirmed it in this announcement.

The raise now sits between three forces. First, investor appetite for Chinese AI companies with global reach. Second, regulatory limits on how quickly talent and companies can move across borders. Third, Manus's own need to rebuild trust after an acquisition that was ordered unwound and a split that required some user data deletion. The company is also reported to be considering going public in Hong Kong, which would extend the timeline from private funding to public-market scrutiny.

What to watch next is whether Manus can convert the $500 million round into stable hiring, product expansion, and clearer disclosure around valuation and user data. The company has moved from a viral agent demo to a $2 billion Meta deal, then to a forced unwind and a $500 million-plus independent funding round. It remains in a transitional stage: still private, still growing, and still operating under the shadow of the Meta collapse.