AI security startup HiddenLayer has raised $100 million in a Series B funding round, announced in September 2026, as enterprise spending on AI security tools accelerates sharply. The round was led by Delta-v Capital, with participation from Ten Eleven Ventures, Morgan Stanley, Microsoft’s M12, Booz Allen Hamilton, and others.
The Austin-based company makes tools to protect AI models, agents, and workflows from adversarial attacks, vulnerabilities, and malicious code injections. Co-founder and CEO Chris Sestito told TechCrunch that HiddenLayer’s annual recurring revenue grew more than 10x over the past year, now sitting in the “tens of millions” of dollars, with over 90% of that growth driven by customers who signed on in the past year. Financial services firms, large tech companies, the Department of Defense, and the intelligence community are among its current customers. One customer is described as a “leading frontier model provider” with more than 700 million weekly users.
The funding comes as the broader AI security market expands rapidly. Gartner estimates companies will spend $2.83 billion in 2026 on products to secure AI tools — 83% more than 2025 — with spending expected to reach nearly $4.78 billion in 2027.
HiddenLayer’s core product suite covers discovery, runtime protection, attack simulation, and supply chain security. Sestito said the company has extended these capabilities to address prompt injection, agent manipulation, and malicious tool use as agentic AI deployments have grown. The company also scans roughly 50 AI file frameworks to detect hidden or misrepresented open-source models. Sestito likened the company’s runtime security approach to traditional endpoint detection and response solutions, applied specifically to AI.
HiddenLayer plans to use the new capital primarily to build out sales and distribution, continue expanding its engineering and research teams, and enter European and EMEA markets. Sestito acknowledged that some AI security features could eventually be absorbed into platforms built by companies such as Microsoft, OpenAI, and AWS, but said he expects those platforms to focus on governance features rather than the type of protection HiddenLayer provides.
Source: TechCrunch