Meta Platforms Inc. has picked up Manus, a hypergrowth artificial intelligence startup. It’s most notorious for its extremely high user growth and its strong run of quarterly revenue growth. Founded only eight months ago by Chinese entrepreneurs, Manus has made significant strides in the AI sector, claiming to outperform industry giant OpenAI’s Deep Research.
Manus came out of parent company Butterfly Effect, which was founded in Beijing in 2022. During mid-2023, the founders moved to Singapore, looking for a more favorable ecosystem to run their operations. This decision followed an upsurge of concern regarding the growing power of Chinese tech firms in the global marketplace.
That draw has already garnered the startup lots of attention from high-profile backers. Its most prominent investors are Tencent, ZhenFund and HSG, formerly known as Sequoia China. In April, Benchmark led a major financing round for Manus, raising a stunning $75 million. This collaborative and strategic maneuver raised Manus’s post-money valuation to a stunning $500 million. That same general partner at Benchmark, Chetan Puttagunta, was instrumental in recruiting the now-CEO of Manus to the company’s board.
Manus is already a happy home to millions of users. Moreover, it too has recently broken through the $100 million ARR ceiling! The firm currently offers subscriptions through two tiers priced at $39 or $199 per month. With these plans, users can unlock its most cutting-edge AI models. Meta’s investment further solidifies the startup’s position in the competitive AI landscape.
Despite all its undeniable merits, the acquisition has sparked bipartisan concerns in U.S. legislature. Senator John Cornyn (R-Texas) said he was concerned about American investors subsidizing a company that started in China. But he still challenged the intelligence of these types of investments, which he warned could counter-productively strengthen adversarial capabilities.
“Is it a good idea for American investors to subsidize our biggest adversary in AI, only to have the CCP use that technology to challenge us economically and militarily? Not me.” – Senator John Cornyn
After the Meta acquisition completes, Manus will no longer be providing its services, and Manus will no longer be operating in China. A spokesperson for Meta confirmed that “there will be no continuing Chinese ownership interests in Manus AI following the transaction,” indicating a clear shift in the company’s operational focus.
The acquisition makes sense considering Meta’s ongoing efforts to bolster its AI capabilities as competition in the tech industry continues to intensify. Now, Manus is joining Meta’s growing portfolio of independent Web3 studios. Beyond this, it has the chance to use its advanced technology and vast user base to innovate further.
