Arcade, a burgeoning AI agent infrastructure startup, was co-founded by Alex Salazar, a former Okta executive, and Sam Partee, a former Redis engineer. Recently, Arcade secured $12 million in funding from Laude Ventures, a new fund launched in 2024 by Andy Konwinski, co-founder of Perplexity.
This investment marks Laude Ventures' first publicly announced investment. Pete Sonsini, a partner at the fund, stated that their portfolio includes notable companies such as Databricks, Anyscale, and Perplexity.
This is not Salazar's first entrepreneurial venture. In 2017, he sold his authentication API startup, Stormpath, to Okta, where he served as Vice President of Product for several years. Sam Partee focuses on building applications based on large language models (LLMs) and has contributed to key open-source projects like LangChain and LlamaIndex.
After witnessing the launch of ChatGPT 3.5, Salazar recognized the future potential and decided to found an AI agent company, establishing Arcade in February 2024. However, they quickly encountered numerous challenges in the practical operation of AI agents.
Salazar mentioned their attempt to build a site reliability agent to compete with companies like Datadog, but found that most agents had very limited functionality. The founders faced repeated difficulties during development, primarily because many agents used LLMs trained on public data and lacked access to private data, preventing them from completing necessary tasks.
Therefore, Salazar and Partee decided to position Arcade as the infrastructure for AI agents, similar to Okta's role in the SaaS cloud services sector. They built a tool invocation platform designed to help agents access the necessary services and data.
During agent demonstrations, clients showed less interest in the agents themselves and more concern about making them work effectively. Ultimately, they decided to shift their focus away from the agents themselves and instead sell their underlying tool invocation platform.
Arcade's technology allows each agent to have the same permissions as the user, accessing the same applications and data. Arcade supports usage-based pricing and subscription models. It integrates with OAuth, handling authentication for thousands of SaaS services and websites, while providing secure token management to prevent LLMs from directly accessing credentials.
Sonsini stated that as an investor, he consistently seeks founders with strong technical backgrounds, and Arcade perfectly aligns with this focus. He emphasized that many AI startups concentrate on eye-catching LLM applications, while he values opportunities at the infrastructure level—a key factor in Arcade's success.
Key Highlights:
💰 Arcade secured $12 million in funding to improve the efficiency of AI agents.
🔧 The company founders have extensive experience from working at prominent companies like Okta and Redis.
🔗 Arcade's technology ensures agents have the same access permissions as users, enhancing application security and functionality.
