China's Manus Raises Over $500M After Meta Deal Collapse

Overview

Chinese artificial intelligence lab Manus has secured more than $500 million in its first major funding round since the collapse of its proposed acquisition by Meta. The announcement was made via a WeChat post by parent company Butterfly Effect on Thursday, marking a significant recovery for the startup after a turbulent year.

The funding is led by prominent Asian venture capital firms Boyu Capital and IDG Capital. Existing investors, including Tencent, HSG (formerly Sequoia China), and ZhenFund, also participated in the round, signaling continued confidence in the company’s trajectory despite previous regulatory headwinds.

Manus, which gained global attention for its viral AI agent demo last year, had previously been valued at $4 billion during discussions with investors. While the exact valuation for this new round was not disclosed, the influx of capital suggests strong market demand for its agentic AI capabilities.

The company confirmed it will continue hiring both domestically in China and internationally, aiming to expand its engineering and research teams as it pivots back to independent operations.

Funding and Investor Backing

The latest capital raise represents a critical pivot point for Manus. Following the termination of the $2 billion deal with Meta in April, the startup faced uncertainty regarding its future and its ability to compete with Western giants. This new funding round provides the financial runway necessary to scale operations without the backing of a tech superpower like Meta.

Boyu Capital and IDG Capital took the lead roles in structuring the investment. Their involvement is particularly notable given their deep roots in the Asian tech ecosystem and their history of supporting high-growth AI ventures. The participation of existing shareholders such as Tencent further stabilizes the company’s position, as it retains the support of some of the most powerful players in the Chinese digital landscape.

Prior to the Meta deal, Manus was reportedly pulling in annual recurring revenue of over $100 million, a figure that underscores its commercial viability even before the current funding round. The company’s ability to attract fresh capital at this scale indicates that investors view the Meta split not as a fatal blow, but as an opportunity to acquire a substantial stake in a fast-growing independent entity.

Resuming Independent Operations

Manus’s journey to this funding milestone has been fraught with geopolitical and regulatory challenges. In mid-2025, the company relocated a significant portion of its staff from Beijing to Singapore. This move preceded the announcement of the $2 billion acquisition by Meta in December of that same year.

However, in April 2026, Chinese authorities ordered the unwinding of the Meta deal. The decision came amid intensifying worries within China about the potential loss of top-tier AI talent and researchers to Western companies. Regulators were concerned that the acquisition would drain critical expertise from the domestic AI sector, which is viewed as a strategic priority.

Following the collapse of the deal, Manus resumed independent operations in August. As part of the separation agreement, the company was required to delete certain user data that had been shared with Meta. The startup has since been focusing on rebuilding its product suite and strengthening its ties with Chinese institutional investors.

There are also reports that Manus is considering an initial public offering (IPO) in Hong Kong. If successful, this would mark another major milestone for the company, providing liquidity for early investors and a public market profile that could further elevate its status in the global AI landscape.

Product Evolution and Market Position

Manus operates in the highly competitive space of AI agents, offering tools similar to those provided by companies like Cursor, Lovable, and Replit. Its platform allows users to build apps, create designs and presentations, generate video content, and perform complex tasks through natural language interactions.

The company recently launched Manus 2.0, which features a new underlying architecture. This update introduces a new "harness" designed to support a broader range of products and capabilities, aiming to improve performance and reliability for enterprise and consumer users alike.

A key innovation in this release is Cue, a standalone application that gives personal AI agents their own digital identities. These agents can have their own email addresses, phone numbers, digital wallets, and computers. This allows them to communicate autonomously, handle tasks across various services, and even make payments within limits set by their human users.

This shift toward autonomous agents places Manus at the forefront of the "agentic web" trend. As AI models become more capable of executing multi-step workflows rather than just generating text, companies that can offer reliable, autonomous tools are well-positioned to capture significant market share.

With over $500 million in new funding, Manus is now better equipped to compete against both established Western platforms and emerging regional rivals. The company’s return to independence, combined with its robust investor base, suggests that it remains a formidable player in the global AI race despite the setbacks of the past year.