Arcade, an AI agent infrastructure startup founded by former Okta executive Alex Salazar and former Redis engineer Sam Partee, has raised $12 million in funding from Laude Ventures. This investment marks the first publicly announced deal for Laude, a new fund launched in 2024 by Perplexity co-founder Andy Konwinski, a renowned UC Berkeley computer scientist.

The funding is a significant milestone for Arcade, which was founded in February 2024 with the goal of creating a reliable AI agent company. However, Salazar and Partee soon discovered that AI agents have significant limitations, particularly in their ability to connect to other services and access necessary data. The duo realized that most AI agents rely on large language models (LLMs) trained on public data, but not private data, making them ineffective in real-world applications.

Instead of pursuing the development of an AI agent, Salazar and Partee decided to focus on building a tool-calling platform that enables AI agents to access the same apps and data as the workers they assist. This platform, also called Arcade, helps AI agents overcome the limitations of LLMs by providing secure token management and authentication capabilities. Arcade integrates with OAuth, allowing it to handle the authentications of thousands of SaaS services and websites.

The startup's pivot from AI agents to infrastructure was a key factor in securing funding from Laude Ventures. Pete Sonsini, co-founder and general partner at Laude, was impressed by Salazar's technical background and the potential for Arcade's platform to enable billion-dollar businesses. Sonsini, who previously led early investments in Databricks, Anyscale, and Perplexity, is focused on supporting technical founders who are building infrastructure-level solutions.

Arcade's platform is available via usage-based pricing or subscriptions, offering a flexible solution for businesses looking to leverage AI agents in their operations. The startup's technology has the potential to transform the AI agent landscape, enabling the development of more reliable and effective AI-powered solutions.

The funding from Laude Ventures will likely accelerate Arcade's growth and development, as the startup continues to build out its platform and expand its customer base. With its focus on infrastructure and technical expertise, Arcade is well-positioned to make a significant impact in the AI industry.

As the AI landscape continues to evolve, startups like Arcade are playing a critical role in developing the underlying infrastructure necessary to support widespread adoption. With its innovative approach to AI agent infrastructure, Arcade is poised to become a key player in the industry, and its $12 million funding round from Laude Ventures is a significant step forward in achieving that goal.