SEO agency Daydream raises $15 million as generative AI changes the way people search online.
Daydream pairs AI agents that handle SEO tasks such as keyword strategy, content creation, and technical audits with humans who oversee strategy and execution.
WndrCo led the Series A round, with participation from First Round Capital and Basis Set Ventures.
Co-founded by CEO Thenuka Karunaratne and CTO Shravan Rajinikanth, it has raised $21 million to date.
Karunaratne says that despite the “hype bubble” around concepts like generative engine optimization (GEO), which can serve as a buzzword for agencies to sell their services, optimization work in AI search “represents about 90% of the work you do in SEO anyway.”
Both rely on relevant content, backlinks, mentions, crawlability, or how easily a web page can be discovered by search engine bots. He said AI tends to focus more on Reddit and acquired media sources.
Karunaratne got into SEO in high school by building affiliate websites. He said his entrepreneurial journey was “difficult” at first.
He eventually launched Flixed, a streaming search business he founded himself while in college. After pivoting, I was rejected by Y Combinator but encouraged to reapply. Daydream had already raised funding by that time, so he chose to move forward with it, but said the first pre-seed round took months instead of the weeks he expected.
After he reframed the process as a learning experience rather than a win-lose outcome and gained customer leads from successful investors, things started to fall into place.
Today, Daydream’s customers include marketing and SEO executives at companies with 20 to 1,000 employees, including AI sales startup Clay, vibe coding startup Replit, AI image generation OpenArt, and creator monetization platform Beacons.
The funding will not only help Daydream scale its product and engineering teams, but also expand the number of growth leads, who are human SEO employees who mentor the AI agents. Daydream currently has approximately 20 employees.
Karunaratne said that while agencies as a category have historically not been attractive to VCs, AI is changing the economic landscape, adding that Y Combinator ranked AI-native agencies as a top category in its latest startup requirements.
Here’s the pitch deck Daydream used to raise $15 million in Series A. Slides have been edited to make the material publicly available.