AI Startup Manus Secures $500M After Blocked Meta Deal

A Massive $500 Million Comeback Round

AI agent startup Manus is making big moves again. Its parent company, Butterfly Effect, has raised over $500 million in a brand-new funding round.

Investment powerhouses Boyu Capital and IDG Capital co-led the financing. Previous backers also joined in, including Tencent, HSG (formerly known as Sequoia China), and Zhen Fund.

While Butterfly Effect did not officially confirm its new valuation, reports suggest a big leap. Bloomberg previously reported the firm aimed for a $4 billion valuation—double what Meta originally agreed to pay.

The company confirmed the funding in a WeChat post. It plans to use the new capital to keep hiring top talent in China and abroad.

What Makes Manus Stand Out?

Most people are familiar with standard AI chatbots that simply answer questions. Manus builds agentic AI software that goes much further.

Instead of just chatting, these AI agents take complete goals and execute them independently. They can book full travel itineraries or analyze stock portfolios without needing step-by-step guidance.

Manus first launched in March 2025 as an invite-only Chinese rival to OpenAI's $200-a-month agent tool. Demand was so intense that invite codes appeared on resale markets for up to 10 million yuan (over $1.3 million).

Under the hood, Manus combined its own proprietary tech with Anthropic's Claude and fine-tuned versions of Alibaba's Qwen models. It pioneered agentic workflows before many major AI giants entered the space.

The Dramatic Timeline: From Meta Deal to Beijing Intervention

The journey for Manus over the past year reads like a tech thriller. Here is how key events unfolded:

• Mid-2025: Manus relocated core team members to Singapore, shutting down most China operations and laying off dozens of staff in July.
• December 2025: Manus reached $100 million in annual recurring revenue (ARR) just eight months after launching.
• December 2025: Meta announced an agreement to acquire Manus for roughly $2 billion.
• January 2026: China's Commerce Ministry announced it would formally review the acquisition deal.
• March 2026: Co-founders Xiao Hong and Ji Yichao were summoned to Beijing and barred from leaving the country, per Reuters.
• April 27, 2026: China's National Development and Reform Commission (NDRC) ordered the deal unwound and prohibited foreign investment in Manus.
• June 2026: Meta officially cut ties with the startup.
• August 2026: Manus announced a return to independent operations, deleting user data created on or after December 29, 2025, to separate its systems from Meta.

New Products and Heat in the AI Market

Manus is now forging ahead in an increasingly competitive AI market. The company recently launched Cue, an application that gives AI agents their own phone numbers and digital wallets.

Cue allows agents to handle transactions directly on behalf of users, with payments strictly limited to a budget set by the user.

Meanwhile, the broader market continues to heat up. An open-source agent called Open Claw captured developer interest by running locally and taking orders via WhatsApp or Telegram, amassing over 100,000 GitHub stars.

OpenAI subsequently hired Open Claw's creator, Peter Steinberger, to lead its personal agents division. Meta also launched its own coding assistant, Muse Code, in August to compete with Codex and Claude Code.

These developments occur alongside tighter domestic oversight. In May, Chinese authorities began requiring senior AI staff at private firms like Alibaba and DeepSeek to obtain approval before traveling abroad, highlighting global AI competition.

Market Snapshot and Digital Asset Context

As AI tools begin integrating digital wallet features, market observers continue tracking broader crypto trends.

At the time of writing, Bitcoin (BTCBTC-0.74%) was trading around $81,710, reflecting a 3.59% drop over 24 hours. The daily trading range spanned between $80,427 and $83,459, accompanied by $1.8 billion in 24-hour volume.

On prediction platforms like Myriad, market sentiment showed a 57% probability of Bitcoin staying below $82,000 today, and a 55% chance for the week.

Past performance of digital assets is not a guarantee of future returns. Digital asset markets remain highly volatile, and investors should carefully evaluate risks before participating.