Arcade, an AI agent infrastructure startup founded by former Okta executive Alex Salazar and former Redis engineer Sam Partee, has raised $12 million from Laude Ventures.
Laude is a new fund launched in 2024 by Andy Konwinski, co-founder of Perplexity, a computer scientist at UC Berkeley, who co-founded Databricks.
This isn't the only check that Laude cuts. But it was the first public announcement, and Peteson Sinni, a large co-founder and general partner, told TechCrunch. Sonsini has been a long-established NEA known and leads Databricks, early investments in all sizes and embarrassments.
As for Salazar, he is a recurring founder. He landed in OKTA in 2017 after selling Stormpath, an authentication API startup, to the company. He spent the next few years at OKTA as a VP building product. According to Arcade, Partee built LLM-based applications and contributed to several major open source projects, such as Langchain and Llamaindex.
When Salazar saw the debut of ChatGpt 3.5, he saw the future. AI agent company, his next startup idea. The Arcade was established in February 2024.
He and the party soon discovered that the AI agent actually didn't work.
“We were trying to build a reliability agent for the site we were trying to compete with. [companies] Like Datadog,” Salazar said. But “Most agents suck. They don't do that much.”
Salazar and Partee went on to “slam their heads against the wall” in an attempt to connect with other services and acquire agents just to get the data they need to do their job.
One reason they discovered is that many agents use LLMS trained with public data, but not private data. For example, we can talk about the features of our products, but we can't confirm that the order has been delivered.
The pair decided that ARCADE would do what Okta did at once with SaaS Cloud Services. The founder has built a tool call platform for site reliability agents.
“People were very surprised when we showed them a demonstration of that agent. They weren't that interested in the agents themselves,” Salazar said. They wanted to know how agents actually work.
“In the end, we just looked at each other and said… why don't we stop with our agents and sell the underlying tool call platform?” Salazar said.
Enter your Arcade. This allows each agent to access the same app and data with the same privileges as the supporting workers. Arcades are available with usage-based pricing or subscription.
Arcade integrates with OAuth, allowing you to handle authentication of thousands of SaaS services and websites. It also provides secure token management that moves intermediaries and prevents LLM itself from accessing those credentials, Salazar said.
When Sonsini, who supported Salazar along with Stormpass, heard that the founder was running a new startup, he wanted to reach out.
“We are very focused on the founders of the super technical type, so we are very plugged into the research community. We have a limited number of partners who are researchers,” says Sonsini.
Many AI startup founders focus on “shiny objects” surrounding LLMs, such as agents. And the arcade “falls right into that space.”