Butterfly Effect, the owner of the Chinese artificial intelligence laboratory Manus, announced that it had raised more than $500 million in a funding round led by Boyu Capital and IDG Capital, with participation from existing investors including Tencent, HSG, formerly known as Sequoia China, and ZhenFund.
The round represents the company’s first major funding since Meta’s $2 billion acquisition deal for Manus collapsed. Butterfly Effect did not disclose its valuation after the round, although previous reports said it had been in talks with investors to raise $500 million at a valuation of $4 billion.
Funding After the End of the Meta Deal
Manus gained prominence after a demo of an artificial intelligence agent went viral last year. The company moved its employees to Singapore in mid-2025, before announcing an acquisition deal with Meta in December of the same year. However, Chinese authorities ordered the company to withdraw from the deal in April, amid growing concerns in China about artificial intelligence talent and researchers moving to the West.
Manus resumed its independent operations in August after the deal ended, saying that the separation required the deletion of some user data. It was also reported to be considering an initial public offering in Hong Kong, but the company did not respond to TechCrunch’s questions about its valuation.
From Artificial Intelligence Agents to Application-Building Tools
Manus offers artificial intelligence products and agents in a space that overlaps with the tools Cursor, Lovable, and Replit. Its services include a conversational bot and coding tools that allow users to build applications and websites, as well as create designs, presentations, and videos.
The company recently launched Manus 2.0, which it describes as being based on a new architecture, products, and capabilities built around what it calls a new “harness system.” It also unveiled Cue, a standalone application that gives artificial intelligence agents their own email addresses, phone numbers, digital wallets, and computers. The application enables agents to communicate, perform tasks across multiple services, and make payments within limits set by the user.
Why Does This Funding Matter?
The round’s significance is not limited to providing capital to a startup; it tests Manus’s ability to continue growing as an independent company after the failure of the Meta deal and to turn interest in artificial intelligence agents into scalable paid products. Continued hiring inside and outside China indicates that the company is preparing to build an international presence, but the absence of a disclosed valuation leaves the extent of its financial improvement compared with the expectations of the previous round unresolved.
The history of the canceled deal, the relocation of employees to Singapore, and the deletion of some user data after the separation also show that the cross-border expansion of artificial intelligence companies depends not only on technology and funding, but is also affected by the location of talent and data and by regulatory restrictions. The round alone does not prove that Manus has settled the competition in the artificial intelligence agent market, but it gives the company new resources to develop Manus 2.0 and Cue and continue operating outside Meta’s framework.