Ten months ago, Manus looked like the cleanest exit in AI. The agent startup had gone from launch to $100 million in annual recurring revenue in eight months, and Meta agreed to buy it for a reported $2 billion. Then Beijing stepped in, the deal was torn up, and the founders had to buy their own company back.
On October 8, Manus came back swinging. Its parent company, Butterfly Effect, said in a WeChat post that it has raised more than $500 million, its first funding round since the Meta acquisition was unwound. Boyu Capital and IDG Capital led the round, with existing backers Tencent, HSG (formerly Sequoia China) and ZhenFund joining in.
The Manus funding round is a rare comeback: a company that was sold, blocked, unwound and refinanced inside a single year. Here is how it happened and what founders should take from it.
Manus raised more than $500 million on October 8, 2026, six months after China ordered Meta to unwind its reported $2 billion purchase of the AI agent startup.
What Manus Announced
The announcement was short. Butterfly Effect confirmed the size of the round and the lead investors, and said it will keep hiring for roles both in China and overseas. It did not disclose a valuation or say exactly how it will spend the money, according to TechCrunch.
Media reports had said Manus was in talks to raise about $500 million at a valuation of around $4 billion. If that figure holds, Manus would be worth roughly double what Meta agreed to pay for it less than a year ago. The company has not confirmed the number, so treat it as reported, not official.
TechCrunch also reported that Manus is considering a Hong Kong IPO. Nothing has been filed.
How Manus Got Here
Manus launched its general purpose AI agent in March 2025, and a demo of the agent went viral almost overnight. Unlike a chatbot, Manus was built to finish jobs, such as researching a market or building a website, on its own cloud computer.
The company was founded in China by Butterfly Effect, led by chief executive Xiao Hong. In mid 2025 it moved its headquarters and key staff to Singapore. It raised $75 million in a round led by Benchmark.
Growth was fast. On December 17, 2025, Manus said on its blog that it had crossed $100 million in ARR eight months after launch, with a total revenue run rate above $125 million. It said it had processed more than 147 trillion tokens and spun up more than 80 million virtual computers, with 105 employees across Singapore, Tokyo and San Francisco.
Twelve days later, on December 29, Manus announced it was joining Meta. Xiao Hong wrote that the deal would go ahead "without changing how Manus works or how decisions are made." Meta did not publish a price, but the deal was widely reported at more than $2 billion.
Why China Blocked the Meta Deal
The trouble started almost immediately. On January 8, 2026, China's Ministry of Commerce said it would examine whether the acquisition complied with the country's export control and foreign investment rules, The Register reported.
The Singapore move did not help. Reports said co-founders Xiao Hong and Ji Yichao were summoned to Beijing and barred from leaving the country while the review ran. In April, China's National Development and Reform Commission ordered the deal unwound, saying it was not in accordance with state laws. Meta said the deal "complied fully with applicable law."
The message was clear: moving headquarters offshore does not move a company's founders, code or origins out of China's reach, especially in AI.
READ ALSO: OpenAI Offers YC Startups $2M in Tokens, Equity Required
The Messy Split
Unwinding a closed acquisition is rare, and this one was painful. Bloomberg reported that from June, Manus staff were cut off from Meta's internal systems, and an internal memo told Meta employees the company was "sunsetting" Manus tools.
On August 11, Manus told users it was returning to independent operations to comply with regulatory requirements in parts of the world. For an affected group of users, data created on or after December 29, 2025 was deleted on August 23 and 24, after a backup window. The company stressed that this was not the result of a security incident, and a restore portal opened on August 25.
On September 1, Manus said it had "formally resumed independent operations," with its founding team still in charge. According to AFP, the founders and investors bought the company back from Meta. Early backers Tencent, ZhenFund and HSG had already been paid out from the Meta sale, which made the reversal even more complicated.
Manus 2.0 and Cue: The Product Bet
Manus did not wait for the money to land before shipping. On September 28 it launched Manus 2.0, built on a new agent harness called Cascade. In one tested setup, the company says Cascade used 23.2% fewer tokens, finished tasks 28.2% faster and cost 32% less to run than the old system.
The bigger swing is Cue, a standalone app for personal agents. Each Cue agent gets its own email address, phone number, wallet and computer. It can send messages, take calls and make payments within a budget the user sets. That puts Manus in the same race as Big Tech: giving AI agents a real identity that works on your behalf.
READ ALSO: Google's New Gemini Agent Gets Its Own Work Email and Runs Claude Too
Manus by the Numbers
| Milestone | Date | Figure |
|---|---|---|
| Agent launch | March 2025 | Viral demo |
| ARR milestone | December 17, 2025 | $100M ARR, $125M run rate |
| Meta deal announced | December 29, 2025 | Reported $2B+ |
| China orders unwind | April 2026 | Deal cancelled |
| Independence resumed | September 1, 2026 | Founders lead |
| New funding | October 8, 2026 | $500M+ |
Why This Matters
Few startups survive a blocked exit, and fewer come out of one with more money than most rivals raise in years. It tells investors that demand for strong AI agent companies is so high that a regulatory disaster did not scare them off. Tencent doubling down after already cashing out is a strong vote of confidence.
It also shows that a startup's legal home is only part of the story. Regulators look at where the founders come from, where the technology was built and where the talent sits. For a company born in one country and sold to a buyer in a rival one, an exit can be stopped long after the press release.
What It Means for Founders
Founders building anywhere, from San Francisco to Lagos to Nairobi, can take three lessons from Manus.
- Map your regulators before you sign. An exit that crosses borders needs a review of every government that could claim a say, not just the one where you are incorporated.
- Revenue is your insurance. Manus could raise $500 million after a failed sale because it had real paying users and fast growth. A startup without that would not have survived the split.
- Ship through the chaos. Manus launched Manus 2.0 and Cue before the round closed. Investors backed a team that kept building while the deal fell apart.
What to Watch Next
The key questions now are the valuation, if Manus confirms the reported $4 billion figure, and whether it files for a Hong Kong listing. Watch how quickly Cue moves from invite only early access to a full launch, and whether Manus can keep its users in the US and Europe after the data deletion episode. Finally, watch Beijing. How it treats the next Chinese founded AI startup with a foreign buyer will show whether Manus was a one off or the new rule.
Frequently Asked Questions
How much did Manus raise in October 2026?
Manus parent Butterfly Effect said on October 8, 2026 that it raised more than $500 million. Boyu Capital and IDG Capital led the round, with Tencent, HSG and ZhenFund also taking part.
Why did China block Meta's acquisition of Manus?
China's National Development and Reform Commission ordered the deal unwound in April 2026, saying it was not in accordance with state laws. It followed a Ministry of Commerce review of export control and foreign investment rules, despite Manus having moved its headquarters to Singapore.
Is Manus still owned by Meta?
No. Manus said on September 1, 2026 that it had formally resumed independent operations, with its founding team leading the company. AFP reported that the founders and investors bought the company back from Meta.
What is Manus worth now?
Manus has not disclosed its valuation. Media reports said it was in talks to raise at about $4 billion, roughly double the reported price Meta agreed to pay in December 2025.
