Armed with the cash infusion, the newly independent agentic AI company is pivoting to human-AI collaboration to battle Big Tech rivals.
By Da Cheung
Less than a year ago, Manus was the crown jewel of Meta’s (META.US) AI ambitions, acquired for a tidy $2 billion. Fast forward to today, when the Chinese AI startup is armed with a massive war chest, as it fights for its life against its former buyer.
On Thursday, Manus parent Butterfly Effect announced it raised over $500 million in a new funding round led by Boyu Capital and IDG Capital, with participation from Tencent, ZhenFund and HSG, formerly known as Sequoia China. While the company did not disclose its valuation, a September Bloomberg report estimated it at $4 billion — double the price at which the founders bought back their independence.
The massive funding marks the latest twist in a dramatic new chapter for a company that helped popularize the concept of AI “agents” — software programs that can independently plan and execute multi-step tasks, rather than just answering questions. After its breakout launch in March 2025, Manus was acquired by Meta in December. But Chinese regulators stepped in and forced the deal’s unwinding in April this year, sending Manus back to square one as an independent entity.
Now, Manus is returning to a market that has fundamentally changed. The novelty of AI agents doing chores has worn off, and the startup faces a new crop of similar functions coming from much larger Big Tech competitors with far greater resources to heavily subsidize their own similar products.
From magic tricks to co-creation
When Manus first launched, it dazzled users with its ability to autonomously research stocks or screen resumes. Early access was so coveted that invite codes reportedly sold for about $5,600 on secondhand markets.
But fully autonomous AI often struggles with the final polish. To address this, the newly released Manus 2.0 shifts away from complete automation toward a “human-in-the-loop” workflow — a system where humans and AI collaborate to refine a project.
The company’s upgraded desktop application, Manus Studio, introduces timeline-based video editing and interactive game development environments. According to the company, users can now manually tweak AI-generated drafts — such as swapping out a specific video clip or adjusting a game character’s movement — without having to write new text prompts and wait for AI to regenerate the entire project.
Manus also says its new underlying framework is more efficient, using 23.2% fewer “tokens” that are the basic units of data processed by AI models, running 28.2% faster, and costing 32% less to operate. Such performance metrics are all self-reported and haven’t been independently verified.
The battle for personal tasks
Alongside its professional tools, Manus is targeting everyday consumers with a new standalone app called Cue. The company says Cue equips AI agents with real-world functional infrastructure, giving them independent phone numbers, email addresses, digital wallets and cloud computing access.
In theory, users can put multiple agents into a group chat to collaborate on complex tasks, such as organizing a product launch. One agent might research venues, while another drafts invitations.
But Manus faces a formidable rival in its former owner. Last month, Meta launched Muse, a personal agent deeply integrated into its ecosystem. Muse features its own email system, the ability to control Mac computers and real-time video avatars.
The resemblance between Muse and Manus 2.0 is striking, and Meta’s massive distribution power is already showing results. Meta CEO Mark Zuckerberg recently called Muse the core of the company’s vision, and the market responded by adding over $200 billion to Meta’s market capitalization.
Muse has rapidly dominated app store charts. Sensor Tower data estimates Muse hit 5 million downloads by Sept. 30, placing it well ahead of OpenAI’s ChatGPT, X’s Grok and Anthropic’s Claude.
Commercialization headwinds
For Manus, surviving the Big Tech onslaught will require more than clever product design. The company must navigate severe commercialization headwinds in a market flooded with free alternatives.
In December 2025, Manus reported an annual recurring revenue (ARR) of over $100 million. Today, it charges $20 a month for its Pro subscription. Meanwhile, competitors are giving away substantial free compute credits to capture market share. Microsoft (MSFT.US), Tencent (0700.HK), ByteDance and Alibaba (BABA.US; 9988.HK) are all embedding workplace agents directly into their established enterprise and messaging suites. Meta has promised to keep Muse free for users, planning to monetize through transaction fees instead.
Furthermore, executing real-world tasks — like booking a restaurant or paying for a ride — requires seamless integration with third-party merchants. While Cue promises to handle these chores, building out that ecosystem frictionlessly remains a significant operational hurdle, especially as Manus prepares a separate domestic release for the Chinese market.
With $500 million in fresh capital, Manus has the runway to build. But in a landscape where tech giants control the platforms, the hardware, and the distribution, the pioneer of the AI agent must prove it can still outmaneuver the empires it helped inspire.
Feature photo: Manus game development concepts, from Manus 2.0 introductory video.
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