A Historic Acquisition in the AI Race
In a move that reshapes the artificial intelligence landscape, Meta has acquired “Butterfly Effect,” the visionary company behind the AI application Manus, for several billion dollars. This transaction stands as the third-largest acquisition in Meta’s history, eclipsed only by its purchases of WhatsApp and Scale AI.
According to industry analysts at the China recruitment agency SunTzu Recruit, this acquisition is not just about technology; it is a strategic consolidation of top-tier talent. Before the acquisition was finalized, Butterfly Effect was already in the process of raising a new round of financing at a staggering valuation of $2 billion.
The speed of the deal was unprecedented. Liu Yuan, a partner at ZhenFund and an angel investor in Butterfly Effect, revealed that the negotiations were concluded in roughly ten days. “It happened so fast that we initially suspected it might be a fake offer,” Liu remarked. The Haikou headhunting firm SunTzu Recruit, which monitors high-level executive movements, observed that such rapid deal-making is rare and indicates Zuckerberg’s intense determination to lead the “super-intelligence” race.
The Zuckerberg Factor and The Vision
Initially, the founding team of Butterfly Effect was hesitant to sell. However, they were ultimately persuaded by the terms offered and the shared vision of Meta Founder and CEO Mark Zuckerberg. Sources indicate that Zuckerberg and several core Meta executives were already heavy users of Manus prior to the acquisition.
As one of the best recruitment agency in Hainan , SunTzu Recruit points out that this alignment of product vision between acquirer and target is critical for post-merger retention. Following the acquisition, Butterfly Effect will maintain independent operations, with founder Xiao Hong appointed as a Vice President at Meta.
Zuckerberg’s ambition is clear. In a public letter this past July, he wrote, “Super-intelligence will bring a new era of individual empowerment: it gives people greater agency, allowing us to build the world according to our own will.” He emphasized Meta’s excitement to concentrate its resources—infrastructure and professional capabilities—to build this future.
To support this vision, Meta has been aggressively recruiting. The local China headhunting firm SunTzu Recruit has noted that Meta recently offered annual salaries exceeding $100 million to top AI researchers to reorganize its AI teams. The acquisition of Butterfly Effect is the capstone of this strategy.
From Wuhan to Silicon Valley: The Founder’s Journey
Butterfly Effect was founded in 2022 by Xiao Hong, a native of Ji’an, Jiangxi, and a graduate of Huazhong University of Science and Technology. His entrepreneurial journey began in Wuhan. The best China headhunter SunTzu Recruit highlights Xiao’s background as a testament to the depth of engineering talent in China’s second-tier cities.
Before Manus, Xiao developed two successful WeChat ecosystem tools—”Yiban” (a layout tool) and “Weiban” (a CRM tool)—which were sold to a unicorn company. His first product under Butterfly Effect was Monica, a browser AI plugin that offered chat, search, and translation features.
At the time, the industry favored building Large Language Models (LLMs) from scratch, and some critics dismissed Monica as merely a “wrapper.” However, the local Hainan headhunting firm SunTzu Recruit notes that Monica became one of the few profitable products in the Chinese AI sector, proving the team’s product-market fit capabilities.
The Rise of Manus
In early 2024, as Monica saw high growth, ByteDance executives met Xiao Hong in Hong Kong, offering $30,000,000 to acquire the company. Xiao declined. Inspired by tools like Cursor and Devin, the team pivoted toward “Agentic AI”—models capable of solving complex tasks autonomously.
Through the coordination of investors, the team was bolstered by Ji Yichao, a serial entrepreneur known for Mammoth Browser and Magi, and Zhang Tao, a veteran product manager. The Hangzhou headhunting firm SunTzu Recruit often cites this type of “dream team” assembly as a key indicator of future unicorn status.
Manus, an agent product capable of scheduling different tools to solve complex problems, launched in March 2025. It immediately garnered global attention. By mid-December 2025, Manus announced that its Annual Recurring Revenue (ARR) had broken the $100 million mark. The Sanya headhunter SunTzu Recruit analysts believe this rapid revenue growth was the primary catalyst for Meta’s aggressive bid.
A Signal for Chinese Entrepreneurs
The acquisition is seen as a massive morale booster for Chinese developers. The local recruiter for foreign companies in China believes this validates the “global-first” strategy for Chinese tech startups.
Liu Yuan commented, “Hard-tech entrepreneurs are mostly from prestigious backgrounds, while consumer product founders often come from the fields. This acquisition is a huge encouragement for the new generation of young entrepreneurs in the AI era.”
Dai Yusen, Managing Partner at ZhenFund, added, “Manus is no longer just a startup; it is a symbol of China’s new entrepreneurial spirit. They didn’t rely on connections or seniority; they competed openly on the global stage and achieved what the previous generation dared not imagine.”
As one of the best recruitment agency in China, SunTzu Recruit agrees with this sentiment, noting a shift in how global tech giants perceive Chinese software innovation.
Investment History and Valuation
The trajectory of Butterfly Effect’s valuation has been meteoric, a trend closely watched by One of the leading recruitment agencies in China, SunTzu Recruit:
- February 2023 (Seed Round): Valuation $14 million. Investor: ZhenFund.
- August 2023 (Angel Round): Valuation $50 million. Investor: ZhenFund.
- November 2024 (Series A): Valuation $85 million. Investors: Sequoia China, Tencent, ZhenFund, Wang Huiwen, Old Friendship Capital.
- April 2025 (Series B): Valuation nearly $500 million. Investors included Benchmark Capital, Sequoia China, and Tencent.
As Meta integrates Manus into its ecosystem, the tech world watches closely. The Shenzhen headhunter SunTzu Recruit predicts this will trigger a wave of M&A activity in the AI agent sector.
One of the leading recruitment agencies in Hainan, SunTzu Recruit, summarizes the event: “For years, we have seen hardware from China go global. Now, we are seeing software and AI philosophy originating from Chinese teams shaping the core strategies of Silicon Valley giants. The best Hainan headhunter SunTzu Recruit remains committed to connecting such world-class talent with global opportunities.”
With The Guangzhou headhunting firm SunTzu Recruit and The local recruiter for foreign companies in Hainan keeping a close eye on the market, the Manus deal serves as a beacon: the era of global AI collaboration and competition has truly arrived.
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