HiddenLayer Raises $100M to Scale AI Security as Enterprise Demand Surges
The startup's revenue grew tenfold in one year as companies rush to protect AI agents and models from emerging threats.
AI security startup HiddenLayer has raised $100 million in a Series B funding round to expand its suite of tools for securing AI models, agents, and workflows. The investment signals a critical shift in the enterprise landscape as organizations move from experimenting with generative AI to deploying autonomous agents that require rigorous runtime protection.
The funding round was led by Delta-v Capital, with participation from Microsoft’s M12, Morgan Stanley, Booz Allen Hamilton, and Ten Eleven Ventures. The capital injection follows a period of explosive commercial growth; HiddenLayer reported that its annual recurring revenue (ARR) grew more than 10x over the past year, reaching the "tens of millions" of dollars. According to company data, more than 90% of this growth was driven by new customers.
The Shift to Agentic Security
HiddenLayer previously raised a $50 million Series A in September 2023, a time when the market for AI-specific threats was largely theoretical. However, the rapid adoption of generative AI and agentic workflows has transformed the threat landscape. Enterprises now face concrete risks, including prompt injection, agent manipulation, and the injection of malicious code into AI pipelines.
Chris Sestito, co-founder and CEO of HiddenLayer, noted that while the core nature of inference remains the same, the company has expanded its scope from traditional modeling to encompass GenAI and agentic systems. This evolution reflects a broader industry need to secure the AI supply chain and provide real-time protection as AI agents gain more autonomy and access to internal corporate tools.
A Rapidly Expanding Market
The demand for these tools is reflected in the company's diverse client base, which includes the intelligence community, the Department of Defense, large technology firms, and financial services. HiddenLayer also counts a leading frontier model provider with over 700 million weekly users among its customers.
This trajectory aligns with broader market projections. Gartner forecasts that spending on AI security will reach $2.83 billion in 2026—an 83% increase over 2025—and climb to nearly $4.78 billion by 2027. The surge indicates that AI security has transitioned from a niche technical concern to a primary requirement for enterprise risk management.
The Race for the AI Standard
The scale of this funding highlights a high-stakes competition to establish the industry standard for AI security, often described as the "EDR (Endpoint Detection and Response) for AI." As the attack surface expands through the use of autonomous agents, HiddenLayer is competing against both specialized startups and established cybersecurity giants like Palo Alto Networks and Cisco.
Observers will now watch whether HiddenLayer can maintain its growth velocity as incumbents integrate AI-specific protections into their existing platforms. The primary challenge remains the speed of the adversarial race, as attackers develop new methods to bypass the very safeguards these security tools are designed to implement.