HiddenLayer, an AI security startup, has raised $100 million in a Series B funding round led by Delta-v Capital, with participation from several major investors. The funding comes as enterprises increasingly prioritize securing their AI deployments, with spending on AI security tools projected to reach $4.78 billion next year, according to Gartner. The startup, which offers tools to protect AI models, agents, and workflows from adversarial attacks, vulnerabilities, and malicious code injections, has seen significant growth in its annual recurring revenue, which grew more than 10x over the past year. Chris Sestito, co-founder and CEO of HiddenLayer, said the company’s ARR is now in the 'tens of millions' of dollars, with over 90% of that growth driven by new customers signing up in the past year. Financial services and large tech companies building AI products are currently the company’s largest verticals, and it also has contracts with the Department of Defense and intelligence community. One of its customers is apparently a 'leading frontier model provider' with 'more than 700 million weekly users,' which sounds like OpenAI or Anthropic to me.
To make the most of that momentum, the startup has now raised $100 million in a Series B funding round that was led by Delta-v Capital, with participation from Ten Eleven Ventures, Morgan Stanley, Microsoft’s M12, Booz Allen Hamilton, and others. The Austin-based startup broadly still sells what it used to in 2023, but Sestito told TechCrunch that the biggest change it’s had to make was to extend its existing products — discovery, runtime protection, attack simulation, and supply chain security — to address prompt injection, agent manipulation, and malicious tool use. 'Inference is still inference. So whether it’s on a traditional machine learning model, whether it’s GenAI, whether it’s an agentic work stream, a lot of our technology still applied. So really, we haven’t had to pivot, but we’ve had to grow our scope … from traditional modeling to GenAI to agentic,' he said. Sestito stressed that runtime security has especially become a priority as AI deployments grow common across businesses and likened it to traditional endpoint detection and response (EDR) solutions, but specifically for AI.
The company’s new products reflect that shift, and Sestito highlighted a new opportunity for attackers in exploiting open source models. 'We parse and scan about 50 different AI file frameworks to make sure that, especially in the case of open source, open-weight models, that the tool you’re working with is the one you believe it to be, and it’s the one it’s purporting to be. We’re looking at things like models purporting to be one thing, but they’re another — hidden models inside of models,' he said. The startup says the new $100 million is going to help it build in that direction, though with more of a focus on sales and distribution, while continuing to expand its engineering and research. It also plans to expand into Europe and EMEA.
Source: techcrunch
