Meta has acquired the AI startup Manus for billions of dollars, with the entire acquisition negotiation completed in an extremely short period of time, lasting just over ten days. Manus had already achieved an annual recurring revenue of 125 million US dollars earlier this year by selling AI agents to enterprises through subscription services. This acquisition will provide Meta with more direct revenue returns on its substantial investments in the AI field.
$Meta Platforms (META.US)$ The acquisition of AI startup Manus for tens of billions of dollars marks the third-largest acquisition in the history of this social media giant, 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 race.
On Tuesday, according to LatePost, the parent company of Manus, Butterfly Effect, was in the midst of a new round of financing at a valuation of $2 billion prior to the acquisition. The entire acquisition negotiation was completed in an extremely short period, lasting only about ten days. After the acquisition, Butterfly Effect will remain independently operated, and founder Xiao Hong will assume the role of Vice President at Meta.
According to Bloomberg, Manus had achieved an annual recurring revenue of $125 million earlier this year by selling AI agents to enterprises through subscription services. This acquisition will provide more direct revenue returns for Meta's massive investments in the AI sector. Meta CEO Zuckerberg has identified AI as the company's top priority and pledged to invest $600 billion in U.S. infrastructure projects over the next three years, most of which are AI-related.
This move by Meta comes at a time when the company is facing investor skepticism. Despite its heavy investment in AI research and development, including hiring a high-salary research team this summer to develop a next-generation AI model planned for release in spring next year, there are concerns in the market about whether these expenditures can generate meaningful revenue in the short term.
A rapidly rising AI star
Butterfly Effect was founded in 2022 by Xiao Hong, a graduate of Huazhong University of Science and Technology, with its entrepreneurial journey beginning in Wuhan. According to LatePost, Xiao Hong previously developed two plugins within the WeChat ecosystem: the official account layout tool Yiban and the enterprise WeChat customer relationship management tool Weiban, both of which were sold to a unicorn company.
The company's first product was Monica, a browser-based AI plugin offering large-model-driven functions such as chat, search, reading, writing, and translation. Although it was initially criticized as a 'repackaged' product, Monica became one of the few profitable products in China’s AI industry.
In 2024, Ji Yichao, a serial entrepreneur from the post-90s generation, and product manager Zhang Tao joined the team to co-develop Manus. This AI agent product, capable of orchestrating different tools to solve complex problems, was launched in March 2025 and immediately drew attention both domestically and internationally. Manus can perform multiple tasks such as screening resumes, creating travel itineraries, and analyzing stocks. In mid-December this year, Manus announced that its annual recurring revenue had exceeded $100 million.
Rapid capital endorsement
According to LatePost, Butterfly Effect completed four rounds of financing before being acquired by Meta: a seed round in February 2023 with a post-money valuation of $14 million, led by ZhenFund; an angel round in August 2023 with a post-money valuation of $50 million, also led by ZhenFund; a Series A round in November 2024 with a post-money valuation of $85 million, with investors including Sequoia Capital China, Tencent, ZhenFund, Wang Huimin, and Old Friendship Capital; and a Series B round in April 2025 with a post-money valuation nearing $500 million, with investors including Benchmark Capital, ZhenFund, Sequoia Capital China, Tencent, and other top VC funds and tech company founders from both China and the U.S.
According to Bloomberg, Manus's parent company initially established in China before relocating to Singapore and was valued at nearly 500 million US dollars earlier this year in a funding round led by the American venture capital firm Benchmark.
Liu Yuan, partner at ZhenFund and angel investor of Butterfly Effect, stated that the acquisition negotiations were "so fast that there were doubts about whether it was a fake offer." He believes this will be a tremendous inspiration for the new generation of young entrepreneurs in the AI era: "The era belonging to this generation of young Chinese entrepreneurs has arrived."
Meta's AI Strategic Layout
Meta is actively competing with rivals such as OpenAI $Alphabet-A (GOOGL.US)$ and $Microsoft (MSFT.US)$ in the AI race. According to Bloomberg, the company has assembled a high-salary research team to develop a next-generation advanced AI model planned for release in the spring of next year. Meta currently has an AI chatbot called Meta AI, accessible through social media and messaging platforms such as Facebook, Instagram, and WhatsApp, and is also applied to its AI glasses products.
In its statement, Meta said it would continue to operate and sell Manus services while integrating them into its products. The company will acquire Manus’s technology and leadership team but did not disclose the specific placement 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 of ZhenFund and former co-founder of Jumei, stated: "Manus is no longer just a venture; it symbolizes the new entrepreneurial spirit and hope of China’s younger generation. They succeeded on the global stage without relying on connections or seniority, achieving what our previous generation of entrepreneurs could not even dream of accomplishing."
Zuckerberg wrote in a public letter in July: "Superintelligence will usher in a new era of personal empowerment: it grants people greater agency, enabling us to shape the world according to our aspirations." The multibillion-dollar acquisition of Butterfly Effect represents a significant step in Zuckerberg’s pursuit of his 'superintelligence' vision.
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Editor/KOKO