HiddenLayer raises $100M as enterprises rush to secure AI deployments

The financing comes as corporate spending on AI-specific security expands quickly. Gartner estimates companies will spend $2.83 billion this year on products meant to secure AI tools, 83% more than in 2025, and expects spending to reach nearly $4.78 billion next year.

HiddenLayer's main customer verticals are financial services and large technology companies building AI products, and it also holds contracts with the U.S. Department of Defense and the intelligence community. TechCrunch wrote that one customer appears to be a "leading frontier model provider" with more than 700 million weekly users. The company sells discovery, runtime protection, attack simulation and supply-chain security tools, and has extended them to address prompt injection, agent manipulation and malicious tool use.

Sestito said the underlying technology has not required a pivot as customers moved from traditional machine learning to generative AI and agentic workflows. "Inference is still inference. So whether it's on a traditional machine learning model, whether it's Gen AI, 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 Gen AI to agentic," he said.

Runtime protection has become a central priority now that AI deployments are commonplace in business, Sestito said. He described the company's role as analogous to endpoint detection and response, but for AI. HiddenLayer also scans about 50 AI file frameworks as part of its supply-chain security work. "We're looking at things like models purporting to be one thing, but they're another — hidden models inside of models," he told TechCrunch.

HiddenLayer said the new capital will go toward sales and distribution, continued expansion of engineering and research, and growth into Europe and EMEA. The company previously raised a $50 million Series A about three years ago.

The competitive field is likely to put pressure on the startup. Large cybersecurity vendors such as Cisco, Palo Alto Networks and Check Point often prefer to buy rather than build this type of technology, while startups Noma and Zenity have each raised more than $100 million for adjacent or overlapping products, TechCrunch reported. Sestito acknowledged that some security features could eventually end up inside platforms from Microsoft, OpenAI or AWS, while predicting AI infrastructure will move toward governance controls such as discovery, identity and policy rather than his company's security niche.

He said HiddenLayer's task now is to "scale vertically alongside artificial intelligence" and later expand horizontally into cybersecurity areas that increasingly depend on AI.