Butterfly Effect Seeks $5B Valuation in New Funding Round, Reflecting 500% Growth

Butterfly Effect, the Chinese company behind the AI Agent product Manus, is reportedly seeking a new round of funding with a target valuation of at least $5 billion. This valuation represents a significant increase of approximately five times the valuation from the previous round of funding. The company is in discussions with potential investors, including prominent venture capital firms. The new funding round is led by a Chinese tech giant and a prominent venture capital firm, with an existing investor also participating. This investor has been an early supporter of the company since its inception in 2023. The company utilizes the Anthropic Claude AI model in its operations. This development underscores the growing interest and investment in the AI sector, particularly in China, where the market for AI technologies is rapidly expanding. The substantial increase in valuation reflects the high demand and potential for AI solutions in various industries, as well as the confidence investors have in the company's growth prospects. The funding will likely be used to further develop and expand the capabilities of the Manus AI Agent, as well as to support the company's broader strategic initiatives.

Since its launch in March, Manus AI has gained significant traction in the tech community and on social media platforms. The AI tool is capable of performing a wide range of tasks, including browsing multiple websites to execute travel bookings and stock analysis, positioning itself as the world's first universal agent. The rapid growth in user demand has put a strain on the company's server capacity and operational costs, making this new round of funding crucial for its continued expansion. Despite limiting the number of users, the company has already incurred over $1 million in costs for using the Anthropic Claude model within the first two weeks of its launch, with 2.6 million users waiting for an invitation code.

Butterfly Effect has designed Manus primarily for users outside of China, with the United States being its main target market. However, with increasing interest from domestic users, the company has recently announced a partnership with a major tech conglomerate to provide services in China using local AI models and computing platforms. In addition to Manus, the company operates another product called Monica.im, which generates text, images, and videos using models from various providers, including OpenAI, Anthropic, Google, and DeepSeek. The company's ability to provide services is currently constrained by server capacity and operational costs, making the new round of funding essential for its business expansion. The company is also considering opening an office in Tokyo, which would be its first office outside of China, as it views Japan as a key market after the United States.

The new funding round is expected to help Butterfly Effect expand its team and enhance its operational capabilities. The company currently has fewer than 80 employees and is preparing to open an office in Tokyo, its first outside of China. This move underscores the company's strategic focus on expanding its global footprint and tapping into new markets. The funding will also support the company's efforts to improve its server infrastructure and reduce operational costs, ensuring that it can meet the growing demand for its AI services. Overall, the successful completion of this funding round could mark a significant milestone for the AI industry, demonstrating the potential for AI solutions to revolutionize various sectors and drive economic growth.