When HiddenLayer raised its $50 million Series A three years ago, whether AI threats would materialize in enough quantity to sustain a real market was an open question. That question is now answered emphatically.
The Austin-based startup 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, Booz Allen Hamilton, and others. CEO Chris Sestito told TechCrunch that annual recurring revenue grew more than 10x over the past year into the tens of millions of dollars, with over 90% of growth driven by new customers.
One customer is apparently a leading frontier model provider with more than 700 million weekly users — language that strongly suggests OpenAI or Anthropic. Financial services, large tech companies, the Department of Defense, and intelligence agencies round out the client base.
The company sells discovery, runtime protection, attack simulation, and supply-chain security for AI models, agents, and workflows. The biggest evolution has been extending those capabilities to address prompt injection, agent manipulation, and malicious tool use — risks that barely existed as a category when HiddenLayer launched.
Inference is still inference, Sestito said. Whether it is on a traditional machine learning model, whether it is GenAI, whether it is an agentic work stream, a lot of our technology still applied. So really, we have not had to pivot, but we have had to grow our scope.
He highlighted a particularly acute vulnerability in open-source models: HiddenLayer scans about 50 AI file frameworks to detect models masquerading as something else — hidden models inside of models. Gartner estimates companies will spend $2.83 billion on AI security products in 2026, up 83% from 2025, and projects spending will reach $4.78 billion next year.
The $100 million will fund sales and distribution expansion, continued engineering investment, and a push into Europe and EMEA. The AI security market is heating up: Noma and Zenity have each raised over $100 million in adjacent spaces, while large cybersecurity vendors like Cisco, Palo Alto Networks, and Check Point increasingly prefer to acquire rather than build.
HiddenLayer's bet is that AI infrastructure will grow toward governance features — discovery, identity, and policy controls — while the specialized runtime security layer remains a distinct market. For now, the company's job, as Sestito puts it, is to scale vertically alongside artificial intelligence.
