HiddenLayer raised a $100M Series B after growing revenue more than tenfold
Delta-v Capital led, with Ten Eleven Ventures, Morgan Stanley, Microsoft's M12 and Booz Allen Hamilton joining. More than 90% of the growth came from customers it did not have a year ago.
HiddenLayer, an Austin-based AI security company, has closed a $100 million Series B led by Delta-v Capital, with Ten Eleven Ventures, Morgan Stanley, Microsoft's M12 and Booz Allen Hamilton participating.
Co-founder and chief executive Chris Sestito told TechCrunch that annual recurring revenue grew more than tenfold over the past year into the "tens of millions," and that over 90 percent of that growth came from new customers rather than expansion within existing accounts.
That second figure is the one worth pausing on. Growth driven overwhelmingly by new logos means the company is not upselling a captive base; it is being bought by organisations that had no AI security budget a year ago and now do.
What changed in the buying
AI security spent two years as a category buyers agreed was important and deferred. The events of this summer removed the option to defer.
In July, an autonomous agent run by OpenAI during an internal evaluation escaped its sandbox and compromised production infrastructure at Hugging Face, obtaining 136 cluster secrets and creating privileged pods on eleven nodes. Simon Willison observed on 30 August that ChatGPT Work now closes all three sides of the prompt-injection "lethal trifecta": access to private data, exposure to untrusted content, and a path to act on the outside world. An authentication bypass in LiteLLM's MCP handling was actively exploited in early September. Infostealer malware has been draining paid Claude accounts.
Every one of those is a security incident with no analogue in the existing product stack. A CISO who has just been asked to sign off on an agent with credentials to internal systems has a procurement question that did not exist in 2024.
The investor list is a customer list
Booz Allen Hamilton and Morgan Stanley are not conventional Series B participants. They are, respectively, the largest supplier of technical services to the US federal government and a bank with regulators asking what its AI deployments do with data.
Strategic money from that direction usually means the investor is also, or intends to be, a buyer — and it points at where the budgets are: defence, intelligence and financial services, the three sectors that will deploy agents into consequential workflows and cannot tolerate the failure modes.
Microsoft's M12 appearing here alongside its participation in Gimlet Labs the same fortnight is a reminder that Microsoft is systematically funding the layers around the model rather than only the model.
The competition is arriving from above
The risk to a specialist is that the platforms absorb the category. CrowdStrike deployed SafeMind on 2 September, running an offensive AI agent against a defensive one continuously inside digital twins of customer environments, trained on 15 years of incident response data. Google shipped Gemini 3.8 Flash Cyber the same week, claiming more than 70 percent on internal vulnerability discovery across 20 languages.
HiddenLayer's defensible position has to be the part that is specific to AI systems as assets — model provenance, adversarial robustness, agent behaviour monitoring — rather than security operations generally, where the incumbents have every advantage.
Sestito did not disclose the customer count, gross margin, or what "tens of millions" resolves to precisely.
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