UNSPECIFIED — Daydream, a search engine optimization agency that combines artificial intelligence agents with human strategists, raised $15 million in a Series A funding round led by WndrCo. First Round Capital and Basis Set Ventures also participated in the round, bringing the company's total funding to $21 million.

The funding will be used to scale Daydream's product and engineering teams and expand the number of growth leads overseeing its AI agents. The company currently has about 20 employees.

Daydream, co-founded by Thenuka Karunaratne and Shravan Rajinikanth, uses AI agents to handle SEO tasks while human experts oversee strategy and execution. The company's customers include marketing and SEO heads at companies with 20 to 1,000 employees, including Clay, Replit, OpenArt, and Beacons.

"The work of optimization in AI search is about 90% of what you would do for SEO anyway," Karunaratne, the company's CEO, said in an interview. According to Karunaratne, both AI search optimization and traditional SEO rely on relevant content, backlinks, mentions, and crawlability. AI search, however, tends to weight Reddit and earned media sources more heavily, by some accounts.

According to Karunaratne, AI is changing the economics of agency businesses. Y Combinator ranked AI-native agencies as a top category in its latest Request for Startups.

Daydream used a pitch deck to raise its Series A funding round. Before founding the company, Karunaratne built affiliate websites in high school and later launched Flixed, a bootstrapped streaming search business, in college.

Karunaratne was rejected from Y Combinator but received an invitation to reapply. At the time, Daydream was raising its pre-seed funding round, a process that took months to close instead of the weeks Karunaratne had expected. During that period, he gained customer leads from investors who declined to invest.