When AI security startup HiddenLayer raised its $50 million Series A three years ago, one of the big questions in the space was whether the AI threats the startup was protecting against would manifest in enough quantity to make for a real market. As my former colleague Kyle Wiggers noted at the time, it was difficult to pin down real examples of attacks against AI at scale. How quickly things have changed. Security companies are now scrambling to build products that can monitor not just agents but also the tools and add-ons they use .
While there still aren't many headlines about agents being exploited, the risk of agents going haywire during production is nevertheless real . And so the market for tools to prevent that from happening has exploded: Gartner estimates companies will spend $2. 83 billion this year on products meant to secure AI tools, 83% more than 2025, and expects spending to reach nearly $4. HiddenLayer, which makes tools to protect AI models, agents and workflows from adversarial attacks, vulnerabilities and malicious code injections, has been able to take good advantage of that shift.
Its co-founder and CEO, Chris Sestito, tells TechCrunch that the startup's annual recurring revenue grew more than 10x over the past year. He declined to give an exact number, but said ARR is now in the "tens of millions" of dollars, and over 90% of that growth was driven by new customers signing 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.