A typical merger-and-acquisition process is often time-consuming and costly, even for large, well-resourced private equity firms. They spend countless hours meeting senior executives of potential targets, modeling financial outcomes, and also invest millions in external advisers like accountants, lawyers, and management consultants.
Expenses for these external advisers aren’t reimbursed if a deal falls through, so PE firms wait until they’re certain before engaging expensive specialists such as McKinsey, BCG, or Bain consultants for comprehensive commercial research on the market and target company.
DiligenceSquared, a startup from YC’s Fall 2025 cohort, claims that AI can deliver consultancy-quality commercial research at a fraction of the traditional cost.
The co-founders, Frederik Hansen and Søren Biltoft, have extensive expertise in private equity due diligence. Hansen, a former principal at Blackstone, commissioned reports for billion-dollar buyouts, while Biltoft led similar diligence efforts in BCG’s private equity practice for seven years.
Since their launch in October, DiligenceSquared has completed projects for some of the world’s largest PE firms and mid-market funds, according to Hansen in TechCrunch.
This initial success led Damir Becirovic, a former Index Ventures partner, to lead DiligenceSquared’s $5 million seed round through his new VC firm, Relentless.
Rather than expensive management consultants, the startup uses AI voice agents to interview customers of companies that PE firms are considering buying.
DiligenceSquared is employing an AI-interview model similar to consumer research startups like Keplar, Outset, and Listen Labs, which raised $69 million at a $500 million valuation in January. However, Hansen and Biltoft claim their due-diligence process and final outputs are fundamentally distinct from consumer research.
PE firms typically pay $500,000 to $1 million for McKinsey, Bain, or BCG to interview dozens of corporate customers and produce extensive reports synthesizing insights with proprietary market data, Hansen stated. To maintain the quality of the analysis, DiligenceSquared uses senior human consultants to verify the accuracy and commercial insights.
As AI handles much of the preliminary work, the startup asserts it can offer this analysis for only $50,000.
“We take these great insights that were previously reserved for big decisions, and now make them accessible,” Hansen said. The lower price encourages PE firms to engage DiligenceSquared earlier in the process, even before they have strong conviction in a deal.
DiligenceSquared is not the sole company aiming to disrupt the diligence market. Competitor Bridgetown Research raised a $19 million Series A co-led by Accel and Lightspeed in February 2026.
Alongside Hansen and Biltoft, DiligenceSquared was co-founded by Harshil Rastogi, a former Google engineer.