# Arcade acquires Smithery to control agent tool discovery and execution > Source: > Published: 2026-08-11 04:46:28+00:00 [Arcade](https://www.arcade.dev/) acquired [Smithery](https://smithery.ai/) on August 5th, giving co-founder and CEO [Alex Salazar (@TheMostlyGreat)](https://x.com/TheMostlyGreat) control of a widely used registry for Model Context Protocol tools as Arcade pushes deeper into the infrastructure enterprises use to deploy AI agents. Smithery co-founder [Anirudh Kamath (@kamathematic)](https://x.com/kamathematic) is joining Arcade under the deal, whose financial terms were not disclosed. The acquisition joins two adjacent layers in the agent software stack. Smithery helps developers find, publish and run MCP servers. Arcade handles the authorization, policy enforcement, execution and audit records required when an agent uses those tools inside a business. Arcade can now influence which tools developers discover and sell the runtime that governs those tools in production. That combination explains why the transaction carries more weight than its undisclosed price. As [Forbes reported](https://www.forbes.com/sites/janakirammsv/2026/08/10/arcade-acquires-smithery-to-own-the-agent-tool-supply-chain/), Arcade is bringing a developer-facing catalog into the same organization that evaluates tool quality and sells the enterprise control layer. The arrangement creates a direct route from discovery to procurement, while raising questions about how Arcade will rank tools that compete with its own products. ### Salazar is extending an old identity playbook Salazar has spent much of his career building authentication infrastructure for developers. He previously co-founded Stormpath, an authentication API provider acquired by Okta, and later ran developer products at Okta. Arcade says those products accounted for 25% of Okta bookings. Salazar also holds a computer science degree from Georgia Tech and an MBA from Stanford. Arcade grew out of an attempt by Salazar and co-founder and CTO [Sam Partee (@SamPartee)](https://x.com/SamPartee) to build an agent that could diagnose incidents across servers, observability systems and code repositories. The pair concluded that model reasoning was only part of the problem. An agent also needed a controlled method for acting through a user's permissions across multiple systems. Partee brought a complementary background from Redis and HPE. Arcade says he helped architect more than 100 LLM applications at Redis and previously worked on SmartSim, software connecting high-performance computing systems with machine-learning workloads. Together, the founders positioned Arcade as the runtime between an agent and systems including Google Workspace, Slack, Microsoft and Salesforce. The Smithery purchase extends that thesis upstream. Arcade no longer has to wait for a developer to arrive with a selected tool. It can meet developers while they are searching for one, then carry the deployment into authentication, execution and governance. Kamath described Smithery's original goal as making an emerging "agentic internet" easier to navigate: one click to find an MCP server and one click to run it. Before co-founding Smithery, he led work on Stagehand, Browserbase's open-source browser automation framework. His move to Arcade brings an engineer who has worked on both agent-facing browser automation and MCP distribution into Salazar's enterprise infrastructure operation. Smithery was also built by co-founder [Henry Mao (@Calclavia)](https://x.com/Calclavia), who previously co-founded the academic writing assistant Jenni. [Mao says](https://calclavia.com/) Jenni reached more than 300,000 monthly active users and over $7 million in annual recurring revenue before his 2024 exit. He later built Smithery into an open MCP registry and gateway whose infrastructure, according to his biography, processed 100,000 agent tool calls per day. ### The Series A is already funding consolidation Arcade announced the acquisition less than two months after [raising a $60 million Series A](https://www.arcade.dev/blog/arcade-series-a/) led by SYN Ventures, with strategic investments from Morgan Stanley and Wipro. The June 12th round brought Arcade's reported funding to $72 million and added SYN Ventures founder Jay Leek to its board. Salazar said the capital would fund more tools, deeper governance and wider distribution. Smithery addresses all three. It adds a catalog of MCP servers, a developer audience and hosting infrastructure that Arcade can connect to its enterprise sales motion. The move also builds on a category shift RuntimeWire examined in July, when [agent gateways were emerging as enterprise AI's control layer](/article/agent-gateways-enterprise-ai-control-plane-nutanix-arcade-manufact). Arcade, Manufact and Nutanix were converging on the question of who controls the tools, models, permissions and spending behind agents. Buying Smithery gives Arcade a stronger answer: the control point can begin before a tool is installed. ### Arcade now grades the market it wants to govern Arcade's case for consolidation relies partly on its own research. The [ToolBench benchmark](https://toolbench.arcade.dev/) indexed more than 43,400 MCP servers and analyzed 219,069 tools, according to Arcade. Its accompanying [State of MCP Tools report](https://www.arcade.dev/white-papers/state-of-mcp-tools/) says only 0.5% received an A grade. Those figures are Arcade's measurement of a market where Arcade sells the proposed remedy. The underlying failure modes are concrete: vague descriptions, malformed schemas and overlapping tool names can cause a model to select the wrong action or supply bad parameters. Arcade's commercial pitch is that enterprises need curated tools, user-scoped authorization and an audit trail rather than an unrestricted catalog of community integrations. Owning Smithery makes that pitch easier to deliver. It also concentrates judgment and execution inside one vendor. Arcade can assess a server, decide how prominently it appears, host or package it, authorize its actions and record its use. Tool publishers may gain a shorter route to enterprise buyers, although their distribution becomes more dependent on Arcade's ranking and governance decisions. The market retains alternatives. The maintainers of MCP launched an [official MCP Registry](https://blog.modelcontextprotocol.io/posts/2025-09-08-mcp-registry-preview/) in preview in September 2025 as an open catalog and primary source of server metadata. Its design allows companies to build opinionated public catalogs and private enterprise registries on top of the upstream data. [Docker (@Docker)](https://x.com/Docker) has pursued another integrated approach through its [MCP Catalog and Toolkit](https://www.docker.com/blog/introducing-docker-mcp-catalog-and-toolkit/), combining discovery with containerized execution, credential management and isolation. Integration providers including Composio, Nango, Merge, Workato, Zapier, n8n and Make also compete for portions of the connection and execution workflow. Arcade's bet is that an open protocol will still produce a concentrated commercial layer around trusted distribution. Enterprises can obtain server metadata from an open registry, yet security teams still need to decide which implementation is approved, whose credentials it can use and how every action will be audited. Smithery gives Arcade a place to shape those decisions before procurement begins. The acquisition makes Arcade a more complete supplier and a less neutral intermediary. Salazar has argued that authorization must sit outside the agent because the system taking an action cannot be responsible for approving and auditing itself. Arcade will now face a similar test at the market level: whether developers and enterprises trust one vendor to recommend the tools, grade their quality and govern their execution.