Manus Revenue Growth Strong, Original Investors Drive Buyback

BlockBeats News, June 18th - According to The Information, due to the impact of China's regulatory agency ordering a reversal of the transaction, early Chinese-backed investors in the AI startup Manus are planning to buy back the company from Meta Platforms at the original price of $20 billion during the Meta acquisition. Despite concerns in the startup community about overseas mergers and financing channels being blocked due to this reversal order, it has turned out to be a pleasant surprise for early investors: since being acquired by Meta last December, Manus's subscription revenue has experienced explosive growth, with its Annual Recurring Revenue (ARR) soaring from $1 billion before the acquisition to $4-5 billion in recent weeks. This means investors will reclaim a company with greater valuation potential at a highly cost-effective "discounted price."

In April this year, after several months of investigation, the Chinese government ordered the cancellation of the Manus transaction due to failure to pre-report and concerns about transferring AI core technology and talent to geopolitical opponents. Currently, Meta has internally isolated Manus's business and ceased data sharing. In terms of funding arrangements, Hillhouse Capital Group, ZhenFund, and Tencent will participate in the buyback, planning to use fresh capital to repurchase Meta's shares without requiring LPs to return distributed profits. Due to geopolitical and regulatory constraints, Benchmark, a leading US venture capital firm that led the $75 million investment, will completely withdraw from this buyback, and its original stake may be divided among Chinese institutions.

To adapt to the new regulatory environment and protect investor interests, Manus is considering restructuring the company to transform it into a joint venture registered in China. This move not only allows investors to continue holding shares in dollar terms but also aims to pave the way for a future initial public offering (IPO) in Hong Kong. As regulatory agencies continue to decrease their tolerance for tech companies using a Variable Interest Entity (VIE) structure to bypass domestic scrutiny, this adjustment to an onshore registration structure is seen as a key compliance step for Manus to obtain approval from Chinese regulators for its Hong Kong IPO.

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