AI security firm HiddenLayer secures $100M Series B as enterprise demand surges
HiddenLayer has raised $100 million in Series B funding led by Delta-v Capital, with participation from Microsoft's M12 and others. The company's annual recurring revenue grew more than tenfold over the past year, now reaching tens of millions of dollars. It plans to extend its security products to address prompt injection and agent manipulation threats.
The funding round arrives amid a rapid expansion of the AI security market, with Gartner projecting spending on AI protection tools to reach $2.83 billion this year and nearly $4.78 billion next year. HiddenLayer's growth has been driven largely by new enterprise customers, with financial services and major tech firms building AI products representing its biggest client segments. The company also holds contracts with the Department of Defense and intelligence agencies, and counts a frontier model provider with over 700 million weekly users among its customers.
The startup's technology scans roughly 50 different AI file frameworks, including efforts to detect hidden models embedded within open-weight models that may be disguised as something else. Its product suite spans discovery, runtime protection, attack simulation, and supply chain security, now extended to cover prompt injection and agent manipulation. The company plans to use the new capital for sales and distribution expansion, including entry into European and EMEA markets.
This funding signals that AI-specific security is becoming a mainstream enterprise concern rather than a niche experimental field. As businesses increasingly deploy AI agents and open-source models in production, failures or malicious manipulations could affect customer data, financial decisions, and critical infrastructure. The rapid growth of this market may pressure smaller organizations to adopt such protections, potentially widening the gap between enterprises that can afford comprehensive AI security and those that cannot.