HiddenLayer Raises $100M Series B to Expand AI Runtime Security
The AMW Read
The $100M Series B and reported tenfold ARR growth materially update an AI-security player, but the round remains below the threshold for a cross-market capital signal.
HiddenLayer Raises $100M Series B to Expand AI Runtime Security
Austin-based AI security startup HiddenLayer has raised a $100 million Series B led by Delta-v Capital, with Ten Eleven Ventures, Morgan Stanley, Microsoft's M12, and Booz Allen Hamilton among the participants. The company sells discovery, runtime protection, attack simulation, and supply-chain security for AI models, agents, and workflows. CEO Chris Sestito said annual recurring revenue grew more than tenfold over the past year to the tens of millions of dollars, with more than 90% of growth coming from new customers. HiddenLayer plans to use the capital for sales and distribution, continued engineering and research, and expansion into Europe and EMEA.
The financing lands as enterprise AI security shifts from a theoretical concern to a production budget line. Gartner estimates companies will spend $2.83 billion on AI-security products in 2026, up 83% from 2025, and nearly $4.78 billion in 2027. HiddenLayer has extended conventional model protection to prompt injection, agent manipulation, and malicious tool use, emphasizing runtime defenses as organizations deploy AI systems more broadly. The central market question is whether a specialist can own this control point before larger AI and cybersecurity platforms bundle similar capabilities.
For builders, runtime telemetry, tool-access controls, and checks on model artifacts are becoming deployment requirements rather than optional red-team exercises; HiddenLayer says it parses and scans about 50 AI file frameworks for misleading or embedded models. For investors, its ARR growth claim and new funding are meaningful, but durability will depend on differentiation against adjacent startups such as Noma and Zenity and potential bundling by Microsoft, OpenAI, AWS, or established cybersecurity vendors.