HiddenLayer secures $100M Series B for AI security expansion

Austin-based AI security company HiddenLayer has raised $100 million in a Series B led by Delta-v Capital, following annual recurring revenue growth of more than 10 times over the past year. Co-founder and CEO Chris Sestito said ARR has reached the tens of millions of dollars, with new customers accounting for more than 90% of that growth.

Ten Eleven Ventures, Morgan Stanley, Microsoft’s M12 and Booz Allen Hamilton participated in the round. HiddenLayer said the capital will support sales and distribution, continued engineering and research investment, and expansion into Europe and the wider EMEA region.

AI deployments broaden the security remit

HiddenLayer sells security tools for AI models, agents and workflows. Its platform is designed to address adversarial attacks, vulnerabilities and malicious code injections. The company’s largest customer segments are financial services firms and large technology companies building AI products; it also holds contracts with the Department of Defense and the intelligence community.

The company has expanded the scope of products that it already offered, including discovery, runtime protection, attack simulation and supply-chain security. Sestito said those capabilities have been extended to cover prompt injection, agent manipulation and malicious tool use as generative AI and agentic workflows move into production.

Runtime security has become particularly important in that transition. Sestito compared the requirement to endpoint detection and response, but applied to AI systems. The distinction reflects the operational challenge of monitoring not only a model, but also the agents, tools and add-ons involved in an AI deployment.

Open-source model verification is a new focus

HiddenLayer is also targeting risks around open-source and open-weight models. Sestito said the company parses and scans about 50 AI file frameworks to check that a model is what it claims to be, including scenarios involving hidden models inside other models.

The broader market is growing rapidly. Gartner estimates that companies will spend $2.83 billion this year on products intended to secure AI tools, up 83% from 2025, and forecasts nearly $4.78 billion in spending next year. HiddenLayer is operating alongside startups such as Noma and Zenity, while larger cybersecurity vendors including Cisco, Palo Alto Networks and Check Point are active in the same broad market.

Business implication

For organisations deploying AI, the funding underlines the need to assess security across the full lifecycle: model discovery and supply chain checks, simulated attacks, runtime monitoring, and controls for agents and their tools. Security planning should account for these layers as deployments progress from conventional machine learning to generative and agentic systems.