Butterfly Effect, the parent company of the AI agent startup Manus, said it has closed a funding round of more than $500 million — its first raise since Chinese regulators forced Meta to abandon its acquisition of the company.

Boyu Capital and IDG Capital co-led the round, with existing investors Tencent, HSG (formerly Sequoia China) and ZhenFund also participating, according to Chinese business outlet Yicai. The company did not disclose a valuation or say how the money would be used. Bloomberg reported in September that Manus was close to raising $500 million at a valuation of roughly $4 billion — about double the $2 billion-plus price Meta had agreed to pay.

The path to this round was convoluted. Meta bought Manus in December 2025, after the startup had moved its headquarters and key staff from China to Singapore. On 27 April 2026, a security review office under China's National Development and Reform Commission banned the acquisition and ordered the parties to unwind it. Meta began separating from Manus and in June cut it off from its internal data systems, while early investors moved to buy the company back at the $2 billion valuation. In August, Manus said it would resume operating as an independent company and deleted user data created on or after 29 December 2025.

Manus builds general-purpose AI agents — software that can carry out research and automation tasks with minimal human input — and the new capital underlines that the agent category remains one of the most heavily backed corners of the AI market, even when geopolitics intervenes. The open question, as one analyst framed it, is whether the company can prove scale rather than valuation: agent products are popular but expensive to run, and competition from larger labs is intensifying.

Sources