After a Y Combinator rejection, this founder raised $15 million for his AI search startup. Read the pitch deck.

• Daydream, an SEO agency blending AI agents with human expertise, has raised $15 million.
• CEO Thenuka Karunaratne says AI search optimization is "about 90%" the same as traditional SEO.
• After a rough start, he reframed fundraising as a learning experience rather than a win-or-lose.

As generative AI changes how people search online, SEO agency Daydream has raised $15 million.

Daydream combines AI agents that handle SEO work — 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.

CEO Thenuka Karunaratne and CTO Shravan Rajinikanth cofounded the company, which has raised $21 million to date.

Despite "hype bubbles" around concepts like generative engine optimization (GEO) — which Karunaratne said can serve as buzzwords for agencies to sell their services — the work of optimization in AI search "is about 90% of what you would do for SEO anyway."

Both rely on relevant content, backlinks, mentions, and crawlability, or how easily search engine bots can discover web pages. AI tends to weight Reddit and earned media sources more heavily, he said.

Karunaratne got his start in SEO by building affiliate websites in high school. He said his entrepreneurial journey initially was "rough."

He eventually launched a bootstrapped streaming search business, Flixed, in college. After pivoting, he was rejected from Y Combinator but invited to reapply. By then, Daydream was already raising, so he chose to move forward with it, though he said the initial pre-seed round took months rather than the weeks he expected.

Things started to click after he reframed the process as a learning experience rather than a win-or-lose outcome, picking up customer leads from investors who passed.

Now, Daydream's customers include marketing and SEO heads at companies with 20 to 1,000 employees, such as AI sales startup Clay, vibe coding startup Replit, AI image generator OpenArt, and creator monetization platform Beacons.

Funding will help scale Daydream's product and engineering teams, as well as expand the number of growth leads, the human SEO employees who guide its AI agents. Daydream has roughly 20 employees to date.

While agencies as a category have historically been unenticing to VCs, AI is changing the economics, Karunaratne said, adding that Y Combinator ranked AI-native agencies as a top category in its latest Request for Startups.

Here's a look at the pitch deck Daydream used to raise its $15 million Series A. Slides have been redacted so that the deck can be shared publicly.