AI security startup HiddenLayer raises $100M as enterprise demand surges
AI security startup HiddenLayer has raised a $100 million Series B round as companies increasingly invest in protecting their AI deployments. The company's revenue has grown more than tenfold over the past year.
Austin-based HiddenLayer, which builds tools to protect AI models, agents and workflows from adversarial attacks and malicious code, has closed a $100 million Series B funding round led by Delta-v Capital, with participation from Ten Eleven Ventures, Morgan Stanley, Microsoft's M12, Booz Allen Hamilton and others.
Co-founder and CEO Chris Sestito said the company's annual recurring revenue grew more than tenfold over the past year, reaching the "tens of millions" of dollars, with over 90% of that growth coming from new customers. Its largest customer segments are financial services and large tech companies, alongside contracts with the U.S. Department of Defense and intelligence community. One customer is reportedly a leading frontier AI model provider with more than 700 million weekly users.
A rapidly growing market
According to research firm Gartner, enterprises are expected to spend $2.83 billion this year on AI security tools — 83% more than in 2025 — with spending projected to approach $4.78 billion next year.
Sestito said the company hasn't changed its core business but has expanded its existing products — discovery, runtime protection, attack simulation and supply chain security — to address newer threats such as prompt injection, agent manipulation and malicious tool use. He compared the growing need for runtime protection to traditional endpoint detection and response tools, but tailored specifically for AI systems.
The company also scans roughly 50 different AI file frameworks to detect cases where open-source models conceal hidden models or misrepresent what they actually are.
The new funding will primarily go toward sales and distribution, while continuing to expand engineering and research. HiddenLayer also plans to expand into Europe and the EMEA region. The company faces competition from large cybersecurity firms such as Cisco and Palo Alto Networks, as well as other startups including Noma and Zenity, which have each raised over $100 million.
