Butterfly Effect, the parent company of Chinese artificial intelligence startup Manus, has completed a funding round of more than $500 million, giving the AI agent developer fresh capital as it returns to independent operations following the collapse of Meta’s proposed acquisition.
The funding round was co-led by Boyu Capital and IDG Capital, while existing investors Tencent, HSG and ZhenFund also participated. The deal marks a significant new chapter for Manus after its planned acquisition by Meta was unwound following regulatory intervention in China.
Credits: Tekedia
Manus secures fresh funding
Manus develops general-purpose AI agents designed to perform tasks with limited human intervention. Unlike conventional AI chatbots that primarily respond to user prompts, AI agents can be assigned objectives and carry out multiple steps, including research, analysis and automation.
The company’s latest funding gives it substantial financial backing at a time when demand for autonomous AI systems is increasing. The more than $500 million raised also underscores continued investor interest in companies developing AI agents, despite growing regulatory scrutiny surrounding advanced artificial intelligence technologies.
Boyu Capital and IDG Capital led the new round, with Tencent, HSG and ZhenFund returning as participating investors. The participation of existing backers provides Manus with support as it establishes itself once again as an independent company.
Meta acquisition faced Chinese scrutiny
Manus had attracted global attention earlier this year after Meta agreed to acquire the startup in a deal reportedly valued at more than $2 billion. The transaction would have given Meta access to Manus’ technology and strengthened its position in the rapidly developing AI agent market.
However, the acquisition ran into regulatory opposition in China.
In April, Beijing ordered the deal to be unwound as authorities increased scrutiny of US investment in Chinese startups working on advanced AI technologies. The move highlighted the growing geopolitical tensions surrounding artificial intelligence, particularly as governments seek greater control over sensitive technologies and their ownership.
The reversal forced Manus to reconsider its corporate structure and relationship with Meta.
In August, Manus announced that it would resume operating as an independent company. As part of its separation from Meta, the startup also said it would delete certain user data.
Revenue growth boosts Manus’ appeal
The company’s fundraising comes after rapid growth in its business. The Information reported in June that Manus’ annualized revenue run rate had climbed to around $500 million.
That represented a sharp increase from approximately $100 million when Meta agreed to acquire the company, highlighting the pace at which the startup had expanded its commercial operations.
The growth has also fueled speculation about Manus’ longer-term plans. The company had reportedly been considering a joint-venture structure incorporated in China, potentially creating a pathway toward a future listing in Hong Kong.
Such a structure could help Manus balance its ambitions for international growth with the regulatory environment surrounding Chinese technology companies.
Hong Kong IPO not expected soon
Despite speculation around a potential public listing, Manus is not expected to begin the process for a Hong Kong initial public offering until at least 2027, according to a source familiar with the matter.
The source declined to be named because they were not authorized to speak to the media.
The delay suggests that Manus is likely to focus first on rebuilding its independent operations, scaling its AI products and strengthening its financial position following the separation from Meta.
For investors, the company’s trajectory will offer an important test of whether AI agent startups can sustain rapid commercial growth without the backing of major US technology companies.
Credits: Nikkei Asia
Manus enters a new phase
The latest funding round gives Manus considerable resources as it enters this next phase. The company now has the opportunity to pursue its own strategy, expand its AI agent technology and capitalize on growing demand for systems capable of completing complex tasks autonomously.
At the same time, its future will be shaped by the increasingly complicated relationship between technology, investment and national security.
Manus’ return to independence therefore represents more than the unwinding of a major acquisition. With more than $500 million in fresh funding and reported annualized revenue of around $500 million, the startup is positioning itself as a significant player in the AI agent race — even as it waits until at least 2027 before potentially pursuing a Hong Kong listing.