Founded in less than 3 years, acquired by Meta for billions of dollars! Manus has become a "new benchmark for entrepreneurship in China in the AI era."

Meta acquired the AI startup Manus for billions of dollars, marking the third-largest acquisition by the social media giant since its inception, following WhatsApp and Scale AI. This deal signifies a new phase in Meta's aggressive investment strategy in the AI field and sets a new benchmark for Chinese entrepreneurs in the global AI competition.

On Tuesday, according to LatePost, Manus's parent company, Butterfly Effect, was in the process of raising a new round of financing at a valuation of $2 billion before the acquisition. The entire acquisition negotiation was completed in a very short time, taking just over ten days. After the acquisition, Butterfly Effect will continue to operate independently, with founder Xiao Hong serving as Meta's vice president.

According to Bloomberg, Manus's annual recurring revenue reached $125 million earlier this year, selling AI agents to businesses through subscription services. This acquisition will provide more direct revenue returns for Meta's substantial investments in AI. Meta CEO Mark Zuckerberg has identified AI as the company's top priority and has committed to investing $600 billion in U.S. infrastructure projects over the next three years, most of which are related to AI.

Meta's move comes at a time when it faces skepticism from investors. Despite the company's significant investments in AI research and development, including hiring a high-paying research team this summer to develop a new generation of AI models set to launch in spring next year, there are concerns in the market about whether these expenditures can generate meaningful revenue in the short term.

Rapidly Rising AI Star

Butterfly Effect was founded in 2022, with founder Xiao Hong graduating from Huazhong University of Science and Technology, starting his entrepreneurial journey in Wuhan. According to LatePost, Xiao Hong previously developed two WeChat ecosystem plugins: the public account formatting tool Yiban and the corporate WeChat customer relationship management tool Weibian, which he sold to a unicorn company.

The company's first product is the browser AI plugin Monica, which offers functionalities such as chat, search, reading, writing, and translation driven by large models. Although it was criticized at the time as a "shell" product, Monica became one of the few profitable products in China's AI industry.

In 2024, post-90s serial entrepreneur Ji Yichao and product manager Zhang Tao joined the team to jointly develop Manus. This AI agent product, capable of coordinating different tools to solve complex problems, was launched in March 2025 and immediately attracted attention both domestically and internationally. Manus can perform multiple tasks such as screening resumes, creating travel itineraries, and analyzing stocks. By mid-December this year, Manus announced that its annual recurring revenue had surpassed $100 million.

Rapid Capital Pursuit

According to LatePost, Butterfly Effect completed four rounds of financing before being acquired by Meta: in February 2023, the seed round post-investment valuation was $14 million, with investors including ZhenFund; in August 2023, the angel round post-investment valuation was $50 million, also with ZhenFund as the investor; in November 2024, the Series A post-investment valuation was $85 million, with investors including Sequoia China, Tencent, ZhenFund, Wang Huiwen, and Old Friendship Capital; in April 2025, the Series B post-investment valuation was nearly $500 million, with investors including Benchmark Capital, ZhenFund, Sequoia China, Tencent, and other leading VC funds and tech company entrepreneurs from China and the U.SAccording to Bloomberg, Manus's parent company initially established itself in China before relocating to Singapore, and was valued at nearly $500 million earlier this year in a funding round led by American venture capital firm Benchmark.

Liu Yuan, a partner at ZhenFund and an angel investor in the Butterfly Effect, stated that the acquisition negotiations were "so fast that we even doubted whether it was a fake offer." He believes this will be a tremendous incentive for the new generation of young entrepreneurs in the AI era, saying, "The era belonging to this generation of young entrepreneurs in China has arrived."

Meta's AI Strategic Layout

Meta is actively competing in the AI race against rivals such as OpenAI, Google, and Microsoft. According to Bloomberg, the company has formed a high-paying research team to develop a new generation of advanced AI models planned for release in the spring of next year. Meta currently has an AI chatbot, Meta AI, which can be used across social media and messaging platforms like Facebook, Instagram, and WhatsApp, and is also applied in its AI glasses products.

Meta stated that it will continue to operate and sell Manus services and integrate them into the company's products. The company will acquire Manus's technology and leadership team but did not disclose the specific position of the new team within the organization. This summer, Meta's Chief AI Officer Alexandr Wang joined Meta as part of a high-profile investment in his startup Scale AI.

Dai Yusen, managing partner at ZhenFund and former co-founder of Jumei Youpin, remarked, "Manus is no longer just a startup; it symbolizes the new generation of entrepreneurial spirit and hope in China. They do not rely on connections or seniority, but compete openly on the global stage, achieving what our generation of entrepreneurs could not even dream of."

In a public letter in July, Zuckerberg wrote, "Superintelligence will usher in a new era of personal empowerment: it gives people greater agency, allowing us to drive the world forward according to our own will." The multi-billion dollar acquisition of the Butterfly Effect is a significant step for Zuckerberg in advancing his vision of "superintelligence."