Produced by Leida Finance, Authored by Peng Cheng, Polished by Meng Shuai

As the New Year's countdown nears, American tech behemoth Meta has splurged billions to acquire Butterfly Effect, the AI startup behind Manus, marking its third-largest acquisition in history.

It is reported that post-acquisition, Butterfly Effect will retain independent operations, with its founder Xiao Hong stepping into the role of Meta Vice President. Meta's Chief AI Officer, Alexandr Wang, divulged that Manus boasts a team of roughly 100 in Singapore.

According to available reports, Butterfly Effect was established in 2022. Prior to launching this promising venture, its post-90s founder, Xiao Hong, had already founded Nightingale Technology, developing two WeChat ecosystem plugins that were later sold to a unicorn enterprise.

As Butterfly Effect's undeniable flagship product, Manus is touted as the world's first general-purpose AI Agent. In the authoritative GAIA benchmark tests, Manus significantly outperformed OpenAI's equivalent offerings.

Despite securing a substantial 'dowry' from Meta, Manus still confronts numerous hurdles in its development journey. These include external suspicions of being a mere 'wrapper,' challenges in exploring viable commercialization models, and immense pressure from fierce industry competition.

Meta Invests Billions to Secure Butterfly Effect

On December 30th, the global tech landscape witnessed a blockbuster acquisition: Meta invested billions to acquire Butterfly Effect, the brainchild behind the AI application Manus.

This deal is monumental, marking Meta's third-largest acquisition since its inception, with the investment amount second only to its acquisitions of WhatsApp and Scale AI.

According to 'LatePost', prior to being acquired by Meta, Manus was in the process of initiating a new funding round with a valuation of $2 billion. Meta's founder, Mark Zuckerberg, personally negotiated the deal, swiftly winning over the initially hesitant founding team with his sincerity and grand vision.

In reality, this acquisition transcends a mere capital transaction; it reflects a high degree of strategic alignment. Liu Yuan, a partner at ZhenFund and an angel investor in Butterfly Effect, revealed that Zuckerberg and several key Meta executives are ardent supporters of Manus.

The rapidity with which this acquisition progressed has also astounded the outside world. From initial contact to finalizing the acquisition agreement, the entire process spanned just over ten days. Liu Yuan described the acquisition as 'so swift that we even wondered if it was a hoax.'

Leida Finance learned that post-acquisition, Butterfly Effect will continue to operate independently at the company, team, and product levels while deeply integrating with Meta's core global consumer products. Meanwhile, Butterfly Effect's founder, Xiao Hong, will assume the role of Meta Vice President.

This arrangement underscores Meta's high regard for the Manus team's capabilities and provides ample autonomous development space for the AI startup.

Following the acquisition announcement, Meta's Chief AI Officer, Alexandr Wang, tweeted, 'Welcome to the Manus AI team.' He also disclosed that Manus has a team of around 100 in Singapore.

So, what makes Butterfly Effect, the chosen one by Zuckerberg, so exceptional? According to the team, Manus achieved SOTA (State-of-the-Art) results in the GAIA benchmark tests, demonstrating superior performance compared to OpenAI's equivalent large models.

Compared to other large model products, Manus, as a general-purpose Agent, positions itself as a powerful universal assistant. It not only provides creative ideas to users but also translates them into practical actions, effectively solving users' problems.

In terms of commercial operations, Manus adopts a subscription model, offering AI agent services through tiered payment plans.

In August of this year, Manus's Chief Scientist, Ji Yichao, unveiled financial data for the first time at an event in Singapore. He revealed that Manus's revenue run rate (RRR) had reached $90 million.

In mid-December, Manus announced that eight months after its official launch, its annual recurring revenue (ARR) had surpassed $100 million. The company's total revenue annualized run rate exceeded $125 million, including usage-based and other business revenues.

Since its product release, Manus has processed over 147 trillion tokens and created more than 80 million virtual computer instances.

Regarding this acquisition, Butterfly Effect's founder, Xiao Hong, expressed profound emotions, calling it 'an unforgettable milestone in his lifetime.'

Xiao Hong recalled that when the team founded Manus, few believed in the success of general-purpose AI agents. External doubts persisted that the technology was still in its infancy and that Manus's goals were too ambitious and challenging to achieve.

'But we persevered, overcoming numerous doubts, setbacks, and self-doubts about whether we were chasing an impossible dream,' Xiao Hong remarked.

In Xiao Hong's view, this acquisition is more than just a transaction; it validates the future that the team has been striving to build. The era of artificial intelligence has just begun, and future general-purpose AI agents will not only speak but also act, create, and deliver tasks.

Xiao Hong believes that after being acquired by Meta, the team has the opportunity to achieve these goals with unprecedented intensity. Looking ahead, Xiao Hong confidently stated, 'Thank you to everyone who believes in Manus. The best is yet to come.'

Who is Xiao Hong, the Chosen One by Zuckerberg?

With the completion of this substantial acquisition deal, Xiao Hong, the founder of Butterfly Effect, has once again been thrust into the spotlight.

Public records indicate that Xiao Hong was born in 1993. In 2011, as a freshman in software engineering at Huazhong University of Science and Technology, he demonstrated exceptional entrepreneurial talent.

During his university years, Xiao Hong served as the vice captain of the 'Lianchuang Team' at Qiming College, actively participating in various project practices. He led the team to launch campus products such as a volunteer application assistant, the 'Mie Mie' social tool, and a circle marketplace.

In 2013, Xiao Hong and his classmates successfully developed features like the Huazhong University of Science and Technology version of WeChat's on-campus message in a bottle and WeChat wall, quickly gaining popularity both on and off campus.

In 2015, while most of his classmates pursued job offers from major companies, Xiao Hong, fresh out of college, embarked on an entrepreneurial journey filled with uncertainties and challenges. Through Nightingale Technology, which he founded, he focused on developing tools for the WeChat ecosystem.

After its establishment, Nightingale Technology successively launched products like the Yiban Assistant and Weiban Assistant, effectively addressing pain points in public account formatting and community operations. These products garnered favor from renowned investment institutions such as Tencent and ZhenFund, serving over 2 million B-end users and helping enterprises reach billions of C-end users.

In 2022, AI large models sparked an unprecedented global frenzy. Sensing the immense business opportunities, the astute Xiao Hong promptly founded Butterfly Effect and swiftly led the team to launch the browser AI plugin Monica.

According to 'LatePost', in early 2024, ByteDance executives met with Xiao Hong individually in Hong Kong, offering $30 million to acquire Butterfly Effect. However, Xiao Hong declined the offer.

At that time, products like Cursor and Devin, which utilized large models to solve complex tasks, endowed the models with enhanced capabilities and brought new development opportunities to the industry. Xiao Hong recognized this as a potential pivotal turning point for further advancing his company.

Subsequently, with the active introduction of ZhenFund investors, Ji Yichao, a post-90s serial entrepreneur who developed the Mammoth Browser and Magi knowledge search engine, and Zhang Tao, a former product manager at several companies, joined Butterfly Effect. Together, they led the development of Manus.

This Agent product, capable of flexibly deploying different tools to solve various problems, quickly went viral online and garnered widespread attention from the outside world after its impressive debut in the first half of this year.

Officially, Manus is not merely a conversational AI tool that can only chat but a true autonomous agent. Case studies on the official website demonstrate its ability to think independently, plan, and execute complex tasks, delivering complete results directly.

Whether it's report writing, spreadsheet creation, resume screening, travel planning, stock analysis, or PPT production, Manus can handle them with ease. Compared to products like ChatGPT and DeepSeek, Manus can directly export products that meet user requirements upon task completion and display the execution process.

According to available reports, prior to being acquired by Meta, Butterfly Effect completed four rounds of financing. With each round, Butterfly Effect's valuation soared rapidly.

After completing the seed round in February 2023, Butterfly Effect's post-investment valuation stood at $14 million. Before being acquired by Meta, Manus was initiating a new funding round with a valuation of $2 billion, marking a staggering 100-fold increase in the company's valuation in just three years.

Notably, from a hackathon in 2016 to the eve of the New Year's bell in late 2025, from small plugins to Manus, and from Nightingale Technology to Butterfly Effect, ZhenFund has accompanied Xiao Hong and his team for a full decade.

Dai Yusen, Managing Partner at ZhenFund, stated, 'Manus is not just a startup; it symbolizes the entrepreneurial spirit and hope of a new generation in China. Without relying on connections or comparing qualifications, they have competed fairly on the global stage, achieving what our previous generation of entrepreneurs could not or even dare not imagine.'

'Marrying into a Wealthy Family' Is Just the Beginning; the Future Remains Challenging

As Manus 'marries into' the global tech 'wealthy family' Meta, it still faces numerous daunting challenges.

According to 'National Business Daily', since Manus relies on large language models from companies like Anthropic at the core level and does not develop its own foundational model, some developers have questioned it as a 'wrapper application,' arguing that its innovation lies in product packaging and process orchestration rather than core technological breakthroughs.

Additionally, according to 'Guancha' news, in March of this year, a Chinese team even replicated an open-source version of Manus in just three hours.

Meanwhile, 'Tencent Technology' has also sharply pointed out that Manus attempts to cover dozens of fields but faces issues of insufficient task depth.

For example, in medical scenarios, it can only generate basic reports and cannot replace professional medical decisions. In financial analysis, it relies on single data sources like Yahoo API, leading to suspicions that it is merely an 'advanced version of Excel.' Vertical professional tools (such as Coze and Dify) may offer superior experiences in specific scenarios.

Manus's business model also faces significant challenges, with a single task cost as high as $2, imposing immense pressure on its commercial operations.

Furthermore, the rapid rise of competitors has also brought tremendous competitive pressure to Manus. For instance, GenSpark, founded by a former Baidu executive, achieved an annualized revenue of $36 million with a team of only 20 people in 45 days, with user growth twice that of Manus during the same period.

Tianyancha shows that Butterfly Effect's affiliated companies in mainland China include Beijing Butterfly Effect Technology Co., Ltd. and Beijing Red Butterfly Technology Co., Ltd.

However, in June of this year, Manus co-founder and Chief Product Officer Zhang Tao explicitly stated in a keynote speech at the SuperAI Conference in Singapore that the company's headquarters is now in Singapore.

Subsequently, reports emerged that Manus's domestic team would undergo significant layoffs, with only around 40 core technical personnel from the original 120-member team relocating to the Singapore headquarters, while the rest would be laid off.

Meanwhile, Manus cleared all content on its Chinese social media accounts, including official Weibo and Xiaohongshu platforms, and quietly deleted its March Weibo announcement of cooperation with Alibaba's Tongyi Qianwen. Furthermore, the Manus official website displays 'not available in your region' for Chinese IP access.

In response to rumors of mass layoffs, Manus stated to 'The Paper' in July this year, 'Based on considerations of our operational efficiency, we have decided to adjust some business teams. The company will continue to focus on core business development and enhance overall operational efficiency.'

After 'marrying' tech giant Meta, what lies ahead for Manus's future development? Leida Finance will continue to monitor the situation.