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

Arcade, an AI agent infrastructure startup based by former Okta exec Alex Salazar and former Redis engineer Sam Partee, has raised $12 million from Laude Ventures.

Laude is the brand new fund launched in 2024 by Perplexity co-founder Andy Konwinski, the UC Berkeley laptop scientist who additionally co-founded Databricks.

This isn’t the one test Laude has lower. However it’s the first publicly introduced one, Laude co-founder and common associate Pete Sonsini advised TechCrunch. Sonsini is well-known for his years at NEA, the place he led early investments in Databricks, Anyscale, and Perplexity.

As for Salazar, he’s a repeat founder. He landed at Okta after selling his authentication API startup, Stormpath, to the company in 2017. He spent the following few years at Okta as a VP constructing merchandise. Partee, for his half, had been constructing LLM-based purposes and contributing to some key open supply initiatives like LangChain and LlamaIndex, in keeping with Arcade.

When Salazar noticed the debut of ChatGPT 3.5, he noticed the longer term, and his subsequent startup concept: an AI agent firm. Arcade was based in February 2024. 

Then he and Partee rapidly found that AI agents don’t really work.

“We had been making an attempt to construct a web site reliability agent that was going to compete with [companies] like Datadog,” Salazar stated. However “most brokers suck. They don’t do a lot.”

Salazar and Partee stored “beating our heads in opposition to the wall” making an attempt to get their agent simply to connect with different companies and get the information wanted to do their job.

One cause, they found, is as a result of many brokers use LLMs skilled on public knowledge, however not personal knowledge. To allow them to, as an illustration, discuss product options however can’t verify that an order was delivered. 

The pair determined Arcade would do for AI brokers what Okta once-upon-a-time did for SaaS cloud companies. The founders constructed a tool-calling platform for his or her web site reliability agent.

“Individuals had been very stunned once we would present them the demo of that agent. They weren’t that within the agent itself,” Salazar stated. They needed to understand how they bought the agent to really work.

“Finally, we simply checked out one another and stated … Why don’t we simply, like, cease with the agent and promote the underlying tool-calling platform?” Salazar stated.

Enter Arcade, which helps every agent get entry with the identical privileges to the identical apps and knowledge because the employee it assists, or the job position it performs. Arcade is out there through usage-based pricing or subscriptions.

Arcade integrates with OAuth, so it might probably deal with the authentications of hundreds of SaaS companies and web sites. It additionally acts an middleman, offering safe token administration that forestalls the LLMs themselves from accessing these credentials, Salazar stated.

When Sonsini, who had backed Salazar with Stormpath, heard that the founder was doing a brand new startup, he reached out and needed in.

“We’re very, very targeted on tremendous technical kind founders, and so we’re very plugged in with the analysis group. We’ve got restricted companions which are researchers,” Sonsini stated.

Whereas many AI startup founders are targeted on the “shiny object” round LLMs, like brokers, “my background is the decrease ranges, the infrastructure the place billion-dollar companies might be constructed,” Sonsini stated. And Arcade “falls proper in that house.”