The agent maker Meta had to give back

Butterfly Effect, the parent company of the AI agent start-up Manus, said on Thursday that it had raised more than $500m, its first funding round since Meta was forced to call off its $2bn acquisition of the company, TechCrunch reported, citing a post on WeChat. Boyu Capital and IDG Capital led the round. Existing shareholders Tencent, HSG, the firm formerly known as Sequoia China, and ZhenFund also took part, along with others. The company said it would keep hiring both in China and abroad.

It did not say what the company is now worth or how the money will be spent, the Chinese business outlet Yicai reported, according to The Next Web. In September, Bloomberg reported that Manus was close to raising $500m at a valuation of about $4bn, roughly double the price Meta had agreed to pay. Manus did not respond to TechCrunch's questions about its valuation.

The round closes a ten-month detour. Manus, which went viral after a demonstration of its general-purpose agent last year, moved its staff from China to Singapore in mid-2025, and Meta announced in December that it would buy it. "Joining Meta allows us to build on a stronger, more sustainable foundation without changing how Manus works or how decisions are made," Xiao Hong, the chief executive, said in the company's announcement on 29 December, which said Manus would continue to operate from Singapore. The company was said at the time to be bringing in more than $100m in annual recurring revenue, TechCrunch reported.

Beijing looked past the Singapore address. On Monday 27 April, the National Development and Reform Commission, China's top economic planner, said it had "made a decision to prohibit foreign investment in the Manus project in accordance with laws and regulations, and has required the parties involved to withdraw the acquisition transaction," TechCrunch reported at the time, adding that the commission offered no explanation. As of March, about 100 Manus employees had moved into Meta's Singapore offices, and Xiao was reporting directly to Javier Olivan, Meta's chief operating officer. Xiao and Ji Yichao, the chief scientist, were reported to be barred from leaving mainland China. The founders had set up Butterfly Effect in Beijing in 2022, TechCrunch reported. "The transaction complied fully with applicable law. We anticipate an appropriate resolution to the inquiry," a Meta spokesperson said then.

There was none for Meta. In June it cut Manus off from its internal data systems, and the start-up's early investors moved to buy the company back at the $2bn valuation, The Next Web reported. Users paid part of the cost. To comply with what it called regulatory requirements in specific jurisdictions, Manus deleted data that certain users had generated on or after 29 December 2025, the date it gives for Meta's acquisition, over two days in late August, after giving them a window to back it up. It says its data is now stored in the US and Singapore. On 1 September it said it had formally resumed independent operations, with the founding team still in charge. "Next, you will see Manus become more deeply embedded in your everyday workflows, interact more directly with the world around you, and act more proactively on your behalf," it told users.

The business appears to have grown through the dispute. The Information reported in June that Manus's annualised revenue run rate had risen to about $500m, from $100m when Meta acquired it, according to Reuters. If both reports are right, a $4bn valuation would be about eight times that run rate, against about 20 times for the price Meta agreed in December, by our arithmetic, though the figures come from different reports at different dates and none has been confirmed by the company. On 28 September Manus released Manus 2.0, built on a new in-house agent harness that it says used 23.2 per cent fewer tokens and cost 32 per cent less to run than its previous system in one tested configuration. It has also introduced Cue, an app that gives personal agents their own email addresses, phone numbers, digital wallets and computers, TechCrunch reported.

The company's structure may change too. The Information also reported that Manus was considering a joint-venture structure incorporated in China, which would pave the way for a listing in Hong Kong, Reuters said; TechCrunch said the company is reported to be weighing a Hong Kong listing. The reports of Thursday's round did not say whether it is connected to that plan.

A sale abroad, meanwhile, has become harder. In June, China formalised tougher rules for reviewing outbound investment that codify the approach the planner took with Manus, examining where a company's technology, staff and intellectual property came from rather than where it is incorporated, The Next Web reported, citing Reuters. The Manus case was the first publicly confirmed use of China's foreign-investment security review to unwind a cross-border AI deal, the outlet said. For Chinese-founded AI companies, the route of moving offshore and selling to an American buyer now runs through Beijing. Manus has shown what the alternative looks like: more money, from investors at home, at a price that, if the September reports hold, is about twice the one Meta agreed to pay and then had to give back.