The demand HiddenLayer predicted three years ago has finally arrived. The Austin company, which defends AI models and agents from adversarial attacks and prompt injection, closed a $100M Series B on September 2. Delta-v Capital led, with Microsoft’s M12, Morgan Stanley, Ten Eleven Ventures, and Booz Allen Hamilton also investing.
Industry forecasts explain the enthusiasm. Gartner sees AI security spending hitting $2.83B this year, up 83 percent from 2025, and approaching $4.78B in 2027. When HiddenLayer raised its $50M Series A, skeptics doubted AI-specific attacks would ever form a real market.
Growth followed the market. CEO Chris Sestito reports annual recurring revenue up more than 10 times over the past year, now in the tens of millions, with over 90 percent of that growth coming from new customers. Financial services and big tech lead the roster, alongside the Department of Defense and intelligence community. One client, a frontier model provider with over 700 million weekly users, is widely assumed to be OpenAI or Anthropic.
Product scope widened from classic machine learning into agentic systems. HiddenLayer now watches for prompt injection, agent manipulation, and malicious tool use, with runtime protection positioned as endpoint detection and response for AI. It scans about 50 AI file frameworks to catch open-weight models hiding other models inside.
The money funds sales, distribution, and engineering, plus an EMEA expansion. Consolidation pressure is building, with Cisco, Palo Alto Networks, and Check Point inclined to buy such technology and rivals Noma and Zenity sitting on $100M-plus war chests.
