HiddenLayer nabs $100M as enterprises rush to secure their AI deployments

HiddenLayer has gone from asking whether AI threats were real to raising a huge round because customers are lining up to pay for protection. The Austin startup announced a $100 million Series B led by Delta-v Capital, with Ten Eleven Ventures, Morgan Stanley, Microsoft’s M12, Booz Allen Hamilton and others joining in.

Three years after its $50 million Series A, the market has moved in a way that’s hard to ignore. Gartner now expects companies to spend $2.83 billion this year on products to secure AI tools, up 83% from 2025, and nearly $4.78 billion next year. HiddenLayer’s own business has ridden that wave: CEO Chris Sestito says annual recurring revenue has grown more than 10x in the past year and is now in the “tens of millions” of dollars.

The company still sells much of what it sold in 2023, but the focus has shifted. Its tools for discovery, runtime protection, attack simulation and supply chain security now have to cover prompt injection, agent manipulation and malicious tool use. Sestito says the company hasn’t pivoted so much as widened the scope, moving from traditional models to Gen AI and agentic systems. And runtime security, he says, is becoming the key layer as AI spreads through businesses, a bit like endpoint detection and response, only for AI.

There’s also a sharper edge to the problem now, especially around open-source and open-weight models. HiddenLayer says it scans about 50 AI file frameworks to check whether a model is really what it claims to be, including the possibility of hidden models inside models. That’s the kind of threat that sounds abstract until a customer asks for a fix.

The new money is meant to push sales and distribution harder, while keeping engineering and research moving, and to expand into Europe and EMEA. HiddenLayer is not alone in the space — Noma and Zenity have each raised over $100 million, and big security vendors often prefer to buy rather than build. Sestito also acknowledges that some of these protections could eventually get bundled into platforms from Microsoft, OpenAI and AWS. For now, though, HiddenLayer’s pitch is simple: AI is spreading, and the security layer needs to spread with it.