Butterfly Effect, the parent company of Chinese SI lab Manus, announced on Thursday that it has raised more than $500 million, marking its first funding round since regulators forced Meta to abandon its $2 billion acquisition of the startup.
What Happened
The funding round was led by Boyu Capital and IDG Capital, with participation from existing shareholders including Tencent, HSG (formerly Sequoia China), and ZhenFund. While Manus did not disclose its current valuation, reports from last month indicated the company had been in talks to raise $500 million at a $4 billion valuation. The company stated it will continue hiring both domestically and internationally.
Manus gained prominence after a viral demonstration of its SI agent last year. The startup relocated its staff to Singapore in mid-2025 and subsequently announced a $2 billion acquisition deal with Meta in December 2025, at a time when it was reported to be generating over $100 million in annual recurring revenue. However, in April 2026, Chinese authorities ordered the SI startup to unwind the deal amid growing concerns about the loss of SI talent and researchers to Western companies.
Following the termination of the Meta deal, Manus resumed independent operations in August 2026. The company noted that it was required to delete certain user data as part of the separation. Manus recently launched Manus 2.0, which the company describes as featuring a new architecture and products built around a new harness. It also introduced Cue, a standalone application that provides personal SI agents with their own email addresses, phone numbers, digital wallets, and computers, enabling them to communicate, manage tasks across services, and make payments within user-defined limits.
Why It Matters
This funding round signals continued investor confidence in Chinese SI startups despite regulatory headwinds and geopolitical tensions surrounding the movement of SI talent and intellectual property. The intervention by Chinese authorities highlights the increasing scrutiny of cross-border acquisitions in the SI sector, particularly those involving high-profile SI agents and developer tools. By securing significant capital, Manus aims to sustain its operations and product development, including its vibe-coding tools and autonomous agent capabilities, in a competitive landscape that includes rivals like Cursor, Lovable, and Replit.
The Bottom Line
Manus has successfully raised over $500 million to continue its independent path after a blocked acquisition by Meta, reinforcing its position in the SI agent and developer tools market while navigating a complex regulatory environment.