AI agent startup Arcade has landed $12 million in funding to solve a major pain point holding back AI agents: getting them to actually work. The round comes from Laude Ventures, the new fund launched by Perplexity AI co-founder Andy Konwinski in 2024.
While Laude has made other investments, Arcade is its first publicly announced deal, according to Pete Sonsini, Laude’s co-founder and general partner. Sonsini, a well-known investor from his time at NEA, has backed giants like Databricks, Anyscale, and Perplexity.
Arcade’s founders—Alex Salazar, a former Okta VP, and Sam Partee, a Redis engineer turned AI expert—originally set out to build a site reliability agent to rival tools like Datadog. But reality hit hard.
“We realized most AI agents don’t work. They’re flashy, but they fail at the basic job of connecting to systems and pulling real data,” Salazar explained. Their frustration boiled down to a critical flaw: most agents rely on LLMs trained on public data. That means they can explain features but can’t confirm if your order shipped or your system crashed.
After months of trial and error, the team pivoted. Instead of trying to fix the agents, they decided to build the infrastructure AI agents need to function properly.
The result is Arcade, an AI agent infrastructure platform that acts as the secure bridge between AI agents and the real tools and data they need. Think of it as the “Okta for AI agents”—managing secure access to thousands of SaaS services and systems.
Arcade integrates with OAuth to handle authentication and provides secure token management. This setup ensures that large language models never touch sensitive credentials while allowing AI agents to operate with the same permissions as the humans or job roles they assist.
Salazar said the turning point came when they demoed the system. “People weren’t excited about the agent itself. They were blown away by how we made it actually work,” he shared. That’s when they ditched the agent and focused solely on the underlying tool-calling platform.
Arcade now sells access via usage-based pricing or subscriptions, positioning itself as a core infrastructure layer for companies building serious AI agents.
Backed by AI Infrastructure Investors, Not Hype
Laude Ventures’ Sonsini sees Arcade as a rare AI startup focused on infrastructure rather than shiny LLM features. “This is the layer where billion-dollar companies get built,” he said.
Having backed Salazar’s previous startup, Stormpath (acquired by Okta), Sonsini didn’t hesitate to re-invest. “We’re focused on technical founders who understand the hard problems under the hood. Arcade fits that perfectly.”
Laude’s limited partners include researchers and AI experts, adding another layer of technical depth to the fund’s investments.
A New Chapter for AI Agents
Founded in February 2024, Arcade is still early in its journey, but the pitch is clear: give AI agents the infrastructure they need to securely access data, tools, and services, making them truly useful in enterprise environments.
As more companies explore AI agents, Arcade aims to be the platform that finally enables agents to move beyond the hype—and get real work done.
