AI Security Startup HiddenLayer Raises $100 Million as Companies Race to Protect Their AI Systems
Annual revenue grew more than tenfold in a year. Now HiddenLayer wants to be the security guard standing between your business and the people trying to hijack its AI.
Key points
- HiddenLayer raised $100 million in a Series B funding round led by Delta-v Capital, with backing from Microsoft's M12, Morgan Stanley, and Booz Allen Hamilton.
- The Austin-based startup's annual recurring revenue grew more than 10x over the past 12 months, reaching the "tens of millions" of dollars.
- Gartner, the technology research firm, estimates companies will spend $2.83 billion in 2026 on AI security products, up 83% from 2025.
- More than 90% of HiddenLayer's revenue growth came from new customers signing on in the past year.
- HiddenLayer counts the US Department of Defense and what appears to be a major AI model company among its clients.
Three years ago, HiddenLayer's biggest problem was convincing people the threat was real. The Austin, Texas startup made tools to protect AI systems from attacks, but actual examples of those attacks happening at scale were hard to find. Investors still handed over $50 million in a Series A round, and everyone waited to see whether the market would show up.
It showed up.
Companies big and small are now rushing to secure their AI tools, especially as they adopt AI agents, software that can carry out multi-step tasks on its own, like booking a flight or processing an invoice. Those agents can be tricked, manipulated, or fed poisoned instructions. The risk is real enough that, as first reported by TechCrunch AI, Gartner estimates global spending on AI security will hit $2.83 billion this year, then nearly $4.78 billion in 2027.
What did HiddenLayer actually raise, and who backed it?
The company closed a $100 million Series B round. Delta-v Capital led it, with cheques also coming from Ten Eleven Ventures, Morgan Stanley, Microsoft's M12 venture fund, and defence contractor Booz Allen Hamilton.
CEO and co-founder Chris Sestito told TechCrunch AI the startup's annual recurring revenue, meaning the steady subscription income it can count on each year, grew more than tenfold over the past 12 months. He put the figure in the "tens of millions" but would not give a precise number.
What does HiddenLayer actually do?
It watches AI systems the way antivirus software watches a laptop, looking for things that should not be there.
The startup scans AI models for hidden malware, checks that an open-source model is genuinely what it claims to be, and monitors AI agents in real time for signs they are being manipulated. Sestito described finding "models inside of models", a technique where malicious code is concealed inside a legitimate-looking AI file.
The company says it scans about 50 different AI file formats to catch that kind of threat.
It also guards against prompt injection, where an attacker sneaks hidden instructions into text that an AI agent reads, causing the agent to do something its operator never intended, like leaking data or taking a harmful action.
| Product area | What it does |
|---|---|
| Discovery | Finds all AI models and agents a company is running |
| Runtime protection | Monitors AI systems while they are live and in use |
| Attack simulation | Tests AI systems by mimicking real attack methods |
| Supply chain security | Checks that third-party AI components have not been tampered with |
Financial services firms and large tech companies are the biggest customers right now. One client is described only as a "leading frontier model provider" with more than 700 million weekly users, which points strongly toward OpenAI or Anthropic.
What happens next?
HiddenLayer plans to spend the new money on sales, engineering, and expansion into Europe and the Middle East.
Larger cybersecurity companies, including Cisco and Palo Alto Networks, tend to buy startups in this space rather than build their own products. That makes HiddenLayer a potential acquisition target. Competitors Noma and Zenity have each raised over $100 million to go after overlapping ground.
Sestito acknowledged that some of what his company sells could eventually be absorbed into platforms from Microsoft or AWS. His bet is that specialised, deep protection will remain valuable even as the giants expand. For now, the startup's job is to turn a strong early lead into a lasting business before the bigger players close the gap.
