When AI safety startup HiddenLayer raised its $50 million Sequence A 3 years in the past, one of many massive questions within the area was whether or not the AI threats the startup was defending towards would manifest in sufficient amount to make for an actual market. As my former colleague Kyle Wiggers famous on the time, it was troublesome to pin down actual examples of assaults towards AI at scale.
How shortly issues have modified. Safety firms at the moment are scrambling to construct merchandise that may monitor not simply brokers but in addition the instruments and add-ons they use. Whereas there nonetheless aren’t many headlines about brokers being exploited, the danger of brokers going haywire throughout manufacturing is nevertheless real. And so the marketplace for instruments to stop that from occurring has exploded: Gartner estimates firms will spend $2.83 billion this 12 months on merchandise meant to safe AI instruments, 83% greater than 2025, and expects spending to succeed in practically $4.78 billion subsequent 12 months.
HiddenLayer, which makes instruments to guard AI fashions, brokers and workflows from adversarial assaults, vulnerabilities and malicious code injections, has been in a position to take good benefit of that shift. Its co-founder and CEO, Chris Sestito, tells TechCrunch that the startup’s annual recurring income grew greater than 10x over the previous 12 months. He declined to present an actual quantity, however stated ARR is now within the “tens of hundreds of thousands” of {dollars}, and over 90% of that development was pushed by new clients signing up to now 12 months.
Monetary companies and enormous tech firms constructing AI merchandise are at present the corporate’s largest verticals, and it additionally has contracts with the Division of Protection and intelligence group. One in all its clients is outwardly a “main frontier mannequin supplier” with “greater than 700 million weekly customers,” which feels like OpenAI or Anthropic to me.
To benefit from that momentum, the startup has now raised $100 million in a Sequence B funding spherical 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 nonetheless sells what it used to in 2023, however Sestito advised TechCrunch that the largest change it’s needed to make was to increase its current merchandise — discovery, runtime safety, assault simulation, and provide chain safety — to deal with immediate injection, agent manipulation and malicious software use.
“Inference continues to be inference. So whether or not it’s on a standard machine studying mannequin, whether or not it’s Gen AI, whether or not it’s an agentic work stream, numerous our expertise nonetheless utilized. So actually, we haven’t needed to pivot, however we’ve needed to develop our scope … from conventional modeling to Gen AI to agentic,” he stated.
Sestito harassed that runtime safety has particularly turn out to be a precedence as AI deployments develop frequent throughout companies, and likened it to conventional endpoint detection and response (EDR) options, however particularly for AI.
The corporate’s new merchandise mirror that shift, and Sestito highlighted a brand new alternative for attackers in exploiting open-source fashions. “We parse and scan about 50 totally different AI file frameworks to be sure that, particularly within the case of open-source, open-weight fashions, that the software you’re working with is the one you imagine it to be, and it’s the one it’s purporting to be. We’re issues like fashions purporting to be one factor, however they’re one other — hidden fashions inside fashions,” he stated.
The startup says the brand new $100 million goes to assist it construct in that route, although with extra of a concentrate on gross sales and distribution, whereas persevering with to develop its engineering and analysis. It additionally plans to develop into Europe and EMEA.
HiddenLayer might discover itself tapping that warchest for extra, although. Giant cybersecurity firms, like Cisco, Palo Alto Networks and Check Point usually favor to purchase relatively than construct this kind of tech, whereas startups like Noma and Zenity have raised over $100 million every to tackle adjoining or overlapping areas of this area.
Sestito acknowledged that some elements of the AI safety merchandise his firm affords might ultimately be bundled into the platforms constructed by firms corresponding to Microsoft, OpenAI and AWS. Nonetheless, he expects AI infrastructure will develop in the direction of governance options corresponding to discovery, id and coverage controls, relatively than the sort of instruments that his firm builds.
For now, he says HiddenLayer’s job is to “scale vertically alongside synthetic intelligence,” and ultimately, develop horizontally into elements of cybersecurity that more and more rely upon AI. That’s an formidable objective, however the startup first has to show it might flip its head begin into a permanent enterprise earlier than the remainder of the trade catches up.
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