HiddenLayer raises $100M Series B to expand AI security platform

Austin-based cybersecurity startup HiddenLayer has raised $100 million in a Series B funding round led by Delta-v Capital to expand its AI security platform. The funding comes amid rapid market growth, with Gartner forecasting global AI security spending to reach $2.83 billion in 2026. HiddenLayer, which has seen its annual recurring revenue grow over tenfold to tens of millions of dollars, plans to expand its engineering, research, and sales teams globally while facing rising competition from incumbents like Cisco and Palo Alto Networks.

HiddenLayer Series B funding round

• ▪Over 90% of HiddenLayer's annual recurring revenue growth between September 2025 and September 2026 was driven by new customers.
• ▪HiddenLayer's customer base includes financial institutions, large technology companies, the U.S. Department of Defense, intelligence agencies, and a leading frontier model provider with over 700 million weekly users.
• ▪Austin-based cybersecurity startup HiddenLayer raised $100 million in a Series B funding round led by Delta-v Capital.
• ▪HiddenLayer co-founder and CEO Chris Sestito stated in September 2026 that the company's annual recurring revenue grew more than tenfold over the past 12 months to reach tens of millions of dollars.
• ▪HiddenLayer plans to use the $100 million Series B funding primarily to expand sales, distribution, engineering, and research teams, and to strengthen its presence in Europe, the Middle East, and Africa.
• ▪Investors participating in HiddenLayer's Series B funding round included Ten Eleven Ventures, Morgan Stanley, Microsoft's M12 fund, and Booz Allen Hamilton.

AI security market growth

• ▪Gartner projects that global spending on artificial intelligence security products will reach nearly $4.78 billion by 2027.
• ▪Gartner forecasts that global spending on products designed to protect artificial intelligence tools will reach $2.83 billion in 2026, representing an 83% increase from 2025.

Product expansion for AI agents

• ▪HiddenLayer expanded its security solutions to address prompt-based attacks, manipulation of agent behavior, and the use of malicious tools in generative artificial intelligence and agentic workflows.
• ▪HiddenLayer's technology parses and scans approximately 50 different artificial intelligence file formats to detect model tampering and hidden models, particularly in open-source and open-weight models.

Runtime protection for AI systems

• ▪HiddenLayer CEO Chris Sestito emphasized runtime security as a priority, comparing the approach to traditional endpoint threat detection and response solutions adapted for artificial intelligence.
• ▪HiddenLayer maintains a core product suite focused on system discovery, runtime protection, attack simulation, and supply chain verification for artificial intelligence models.

Competition from cybersecurity incumbents

• ▪Large cybersecurity companies, including Cisco, Palo Alto Networks, and Check Point, are actively acquiring artificial intelligence security startups rather than developing the technology in-house.
• ▪HiddenLayer CEO Chris Sestito expects artificial intelligence infrastructure to develop primarily around governance, identity, and policy controls, leaving specialized cybersecurity tools as a distinct market.
• ▪Startups Noma and Zenity have each raised over $100 million in funding to compete in adjacent or overlapping segments of the artificial intelligence security market.