Arcade raises $12 million for AI agent infrastructure

Arcade, a startup that focuses on AI agent infrastructure, has raised $12 million in funding. This investment comes from Laude Ventures, a new fund created by Andy Konwinski, a co-founder of Perplexity and Databricks. This is Laude's first publicly announced investment. Arcade was founded in February 2024 by Alex Salazar, who previously worked at Okta, and Sam Partee, a former Redis engineer. The company aims to improve AI agents, which they found to be largely ineffective. Salazar noted that many existing AI agents struggle to connect with other services and retrieve necessary data. This is primarily because they use language models trained only on public data. Initially, Arcade set out to create a site reliability agent that could compete with companies like DataDog. However, after realizing the limitations of AI agents, Salazar and Partee decided to pivot. Instead of focusing on the agents themselves, they developed a tool-calling platform that helps agents access the same apps and data as the human workers they assist. Arcade offers its services through usage-based pricing and subscriptions. It integrates with systems like OAuth to manage authentication securely. This setup prevents the AI models from directly accessing sensitive credentials. Pete Sonsini, a co-founder of Laude, expressed his support for Arcade, highlighting the importance of infrastructure in building successful AI businesses. He believes that Arcade operates in a critical space by supporting the underlying technology needed for AI agents to function effectively.