HiddenLayer raises $100M Series B as enterprises rush to secure AI deployments

AI security startup HiddenLayer announced on September 2 that it has raised $100 million in a Series B round led by Delta-v Capital, with participation from Ten Eleven Ventures, Morgan Stanley, Microsoft's M12 venture arm, Booz Allen Hamilton and others.

HiddenLayer builds tools that protect AI models, agents and workflows from adversarial attacks, vulnerabilities and malicious code injections. Co-founder and CEO Chris Sestito said runtime security has become the top priority as AI deployments spread across businesses, likening the category to endpoint detection and response (EDR) — but purpose-built for AI.

The company says annual recurring revenue grew more than 10x over the past year into the tens of millions of dollars, with over 90% of that growth driven by customers that signed on during the same period. Financial services and large tech firms building AI products are its biggest verticals, and it holds contracts with the Department of Defense and the intelligence community; TechCrunch notes one customer appears to be a leading frontier model provider with more than 700 million weekly users.

The round lands in a rapidly expanding market. Gartner forecasts companies will spend $2.83 billion on AI security products this year, up 83% from 2025, and expects spending to approach $4.78 billion next year. Three years ago observers wondered whether attacks on AI would ever become a real market; today security vendors are scrambling to monitor agents and the tools and add-ons they use.

On the product side, HiddenLayer has extended its discovery, runtime protection, attack simulation and supply chain security offerings to cover prompt injection, agent manipulation and malicious tool use. Sestito also flagged open-source models as a fresh attack surface: the company parses and scans roughly 50 AI file frameworks to catch tampered open-weight models and hidden models inside of models.

HiddenLayer says the new capital will go primarily into sales and distribution while it continues expanding engineering and research, and it plans to grow into Europe and the EMEA region.

Competitive pressure is mounting: large security vendors such as Cisco, Palo Alto Networks and Check Point tend to buy rather than build this kind of technology, startups like Noma and Zenity have each raised over $100 million in adjacent territory, and platform giants from Microsoft to OpenAI and AWS could eventually bundle similar features. The real test for HiddenLayer is whether it can turn its head start into a durable business before the rest of the industry catches up.