Butterfly Effect, the parent company of Chinese artificial intelligence lab Manus, announced Thursday via a post on WeChat that it has successfully closed its first funding round since a planned acquisition by Meta fell apart, bringing in more than $500 million in fresh capital.

The round was led by Boyu Capital and IDG Capital, with participation from existing investors including Tencent, HSG - the firm formerly known as Sequoia China - ZhenFund, and several other shareholders. Following the close of the round, Manus confirmed it intends to expand its workforce, with hiring planned both within China and in international markets.

The company did not publicly disclose its post-money valuation. However, earlier reports indicated that Manus had been in active discussions with prospective investors to raise approximately $500 million at a valuation of around $4 billion.

From Viral Demo to Acquisition Fallout

Manus first attracted widespread attention after a demonstration of its AI agent capabilities went viral online. The company subsequently relocated its operations and staff to Singapore in mid-2025, and by that December had announced a $2 billion acquisition agreement with Meta. At the time of that announcement, the startup was reported to be generating annual recurring revenue exceeding $100 million.

The deal, however, never reached completion. In April, Chinese regulatory authorities stepped in and directed Manus to unwind its agreement with Meta. The intervention came amid growing concern within China about the migration of AI talent and key researchers to Western technology companies. The episode reflected broader tensions surrounding the global competition for artificial intelligence expertise and the strategic importance governments are placing on retaining domestic AI capabilities.

By August, Manus had resumed operations as an independent entity following the formal dissolution of the Meta deal. As part of the separation process, the company disclosed that it was required to delete certain user data. In addition to its renewed independence, Manus is reportedly exploring the possibility of an initial public offering on the Hong Kong stock exchange, according to recent reports.

What Manus Actually Builds

Manus develops AI-powered products and agent tools that compete in a market alongside companies such as Cursor, Lovable, and Replit. Its platform includes a conversational AI assistant alongside a suite of so-called vibe-coding tools, which allow users to build applications and websites, generate design assets and presentations, produce video content, and carry out a range of other creative and technical tasks - all without requiring deep programming expertise.

The company recently unveiled Manus 2.0, a significant update that the team describes as introducing an entirely new architectural foundation. The release brings with it a set of new products and expanded capabilities built around what the company refers to as a new harness framework.

Introducing Cue: AI Agents With Their Own Digital Identity

Alongside Manus 2.0, the company launched a separate standalone application called Cue. The product is designed to give AI agents a more concrete presence in the digital world, equipping each agent with its own dedicated email address, phone number, digital wallet, and access to a virtual computer environment.

Through Cue, these agents are able to communicate independently, carry out tasks across a range of online services, and execute financial transactions - all within boundaries and spending limits that are configured by the individual user. The product represents a notable step toward giving AI agents greater functional autonomy in everyday digital and commercial workflows.

With the new funding secured and its product line expanding, Manus appears to be positioning itself for sustained independent growth following a turbulent period that included a high-profile acquisition attempt, regulatory intervention, and a forced restructuring of its operations.