Arcade raises $12M from Perplexity co-founder’s new fund to make AI agents less awful

# Arcade

Arcade, a startup specializing in AI agent infrastructure, has secured a $12 million investment from Laude Ventures. Founded by Alex Salazar, a former executive at Okta, and Sam Partee, an ex-engineer from Redis, Arcade was established in February 2024 with a mission to revolutionize AI agent technology. Laude Ventures, launched in 2024 by Andy Konwinski, co-founder of Perplexity and a UC Berkeley computer scientist known for co-founding Databricks, is behind this investment. This marks Laude's first publicly announced investment, according to Pete Sonsini, co-founder and general partner at Laude. Sonsini, previously at NEA, is recognized for leading early investments in companies like Databricks, Anyscale, and Perplexity. Alex Salazar, a seasoned entrepreneur, joined Okta following the acquisition of his authentication API startup, Stormpath, in 2017. At Okta, he served as a VP, focusing on product development. Meanwhile, Sam Partee has been actively involved in developing LLM-based applications and contributing to significant open-source projects such as LangChain and LlamaIndex. The inception of Arcade was inspired by the launch of ChatGPT 3.5, which sparked Salazar's vision for an AI agent company. However, early attempts at building a site reliability agent revealed significant challenges. Salazar admitted, "Most agents suck. They don’t do much." The main issue was the inability of these agents to access private data, limiting their functionality. Realizing the limitations of their initial approach, Salazar and Partee pivoted. Instead of focusing on the agent itself, they developed a tool-calling platform that enhances agent capabilities. This platform, akin to what Okta did for SaaS cloud services, enables agents to interact with various applications and data with the same access rights as their human counterparts. Arcade offers this service through usage-based pricing or subscriptions and integrates with OAuth for managing authentication across thousands of SaaS services and websites. It also ensures secure token management, preventing LLMs from directly accessing sensitive credentials. When Pete Sonsini learned of Salazar's new venture, he was keen to invest, valuing the technical prowess of the founders and the potential of Arcade to build a billion-dollar infrastructure business. Sonsini emphasized that while many AI startups chase the allure of LLMs and agents, Arcade's focus on foundational infrastructure aligns with his investment philosophy. Arcade's journey reflects a strategic shift from building AI agents to providing essential tools that empower these agents, setting the stage for significant advancements in AI technology.

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