HiddenLayer secures $100m to bolster AI security amid rising demand

HiddenLayer, an AI security startup, has raised $100 million in a Series B funding round led by Delta-v Capital, with participation from Ten Eleven Ventures, Morgan Stanley, Microsoft’s M12, and Booz Allen Hamilton. The funding will support expansion into Europe and EMEA, as well as growth in sales and distribution. The company, which protects AI models, agents, and workflows from adversarial attacks and malicious code injections, reported annual recurring revenue growth over 10x in the past year, with ARR now in the 'tens of millions' of dollars. Chris Sestito, co-founder and CEO, noted that the biggest change was extending products to address prompt injection, agent manipulation, and malicious tool use. Gartner estimates AI security spending will reach $2.83 billion this year, up 83% from 2025, and $4.78 billion next year. Sestito also highlighted the risk of open-source models being exploited, emphasizing the need for verification of tool authenticity. While large cybersecurity firms may acquire similar tech, HiddenLayer aims to scale vertically alongside AI before expanding horizontally into cybersecurity.