Manus raises over $500 million after unwinding Meta acquisition

Butterfly Effect, the parent company of AI startup Manus, has raised over $500 million in a funding round co-led by Boyu Capital and IDG Capital. The raise follows Beijing's April 2026 regulatory order forcing Meta to unwind its $2 billion acquisition of Manus due to foreign investment restrictions. Despite the split, Manus has resumed independent operations, launching Manus 2.0 and reporting a surged annualized revenue run rate of $500 million, demonstrating strong investor confidence.

Recent funding round

• ▪On October 8, 2026, Butterfly Effect, parent of artificial intelligence startup Manus, announced a funding round of more than $500 million co-led by Boyu Capital and IDG Capital, with Tencent, ZhenFund, and HSG, also known as Sequoia China
• ▪Bloomberg reported in September 2026 that artificial intelligence startup Manus was set to double its valuation to $4 billion, though Butterfly Effect did not officially disclose the post-funding valuation from the $500 million funding round
• ▪Eurasia Group China director Dan Wang stated that Manus' $500 million fundraising shows that the short-term fallout of Beijing's block on Meta's acquisition of Manus has been contained and investors remain willing to back Manus as an independent company

Blocked Meta acquisition

• ▪In April 2026, Chinese regulators, including the National Development and Reform Commission, ordered Meta to unwind its $2 billion acquisition of artificial intelligence startup Manus, citing a prohibition on foreign investment amid tightening United States investment scrutiny
• ▪Meta announced its acquisition of artificial intelligence startup Manus in December and had begun integrating the startup's team and technology before Chinese authorities blocked the deal

Operations after Meta split

• ▪Following Manus's separation from Meta, artificial intelligence startup Manus announced in August 2026 that it would delete some user data and resume operating as an independent company, which it officially did in October 2026
• ▪Since Manus's split from Meta, artificial intelligence startup Manus has launched Manus 2.0, built on its Cascade execution system, and introduced Cue, a standalone personal-agent application

Debatable claims

• ▪China's block of Meta's acquisition of Manus was justified
• ▪Regulators cannot effectively undo technology integration once a merger has begun
• ▪Geopolitical tensions will prevent Chinese AI startups from achieving global reach