Arcade, a startup specializing in AI agent infrastructure, was founded by Alex Salazar, formerly with Okta, and Sam Partee, previously a Redis engineer. The company has successfully raised $12 million from Laude Ventures.
Laude Ventures is a newly launched fund by Andy Konwinski, co-founder of Perplexity and Databricks, and a computer scientist affiliated with UC Berkeley. The investment in Arcade is the first publicly disclosed deal from Laude Ventures, as confirmed by Pete Sonsini, co-founder and general partner. Sonsini has a notable history with NEA, where he led initial investments in well-known companies such as Databricks, Anyscale, and Perplexity.
Alex Salazar, having been a repeat founder, joined Okta by selling his authentication API startup, Stormpath, to the company in 2017. He subsequently held a vice president role, focusing on product development. Meanwhile, Sam Partee contributed to numerous key open-source projects and built applications around LLM-based technologies, as noted by Arcade.
The inception of Arcade took place in February 2024, after Salazar was inspired by the release of ChatGPT 3.5, leading to the concept of establishing an AI agent company. However, early into the development, Salazar and Partee realized challenges with AI agents, particularly in competing with established companies like Data Dog. They identified a significant issue with existing AI agents: most lacked the ability to effectively connect to other services and retrieve necessary data due to their reliance on LLMs trained on public rather than private data.
The founders determined that Arcade should enhance AI agents in a way similar to Okta’s previous impact on SaaS cloud services. Salazar and Partee developed a tool-calling platform designed for their site reliability agent. This platform received positive feedback, not necessarily for the agent itself but for its operational efficacy.
Consequently, they made a strategic pivot from focusing solely on agents to selling the underlying tool-calling platform. Arcade offers agents the capability to access applications and data with equivalent privileges as the users or roles they assist, available through usage-based pricing or subscriptions.
Arcade’s platform integrates with OAuth, facilitating authentication with numerous SaaS services and websites. It also serves as an intermediary for secure token management, ensuring LLMs do not directly access credentials, according to Salazar.
Upon learning that Salazar was embarking on a new venture, Pete Sonsini, who had previously supported Stormpath, expressed keen interest in engaging with Arcade. Sonsini emphasized Laude Ventures’ focus on technically proficient founders, maintaining strong connections with the research community and partners from academic backgrounds.
Sonsini stated that, unlike many AI startups drawn to the prominent aspects of LLMs and agents, his expertise lies in foundational infrastructure where large-scale businesses can develop. Arcade is positioned squarely within this category, according to Sonsini.
