A typical merger-and-acquisition process is time consuming and expensive, even for the largest, well-staffed private equity firms. In addition to spending countless hours meeting with senior executives of potential targets and modeling financial outcomes, these groups spend millions of dollars on external advisers: accountants, lawyers, and management consultants.
Since expenses for external advisers are not reimbursed if a deal falls through, PE firms wait until they are certain of their interest before engaging costly specialists such as consultants from McKinsey, BCG, or Bain to perform extensive commercial research on the market and the target company.
DiligenceSquared, a startup that was part of YCâs fall 2025 cohort, says that with the help of AI, it can provide top-tier consultancy-quality commercial research at a fraction of the traditional cost.
The startupâs co-founders, Frederik Hansen and Søren Biltoft, possess deep expertise in private equity due diligence. Hansen was formerly a principal at Blackstone, where he commissioned these reports for multiple billion-dollar buyouts. Meanwhile, Biltoft spent seven years in BCGâs private equity practice leading these types of diligence efforts. Â
Since launching in October, Hansenâs and Biltoftâs industry experience has helped DiligenceSquared complete multiple projects for several of the worldâs largest PE firms and mid-market funds, Hansen tells TechCrunch.
That early traction convinced Damir Becirovic, a former Index Ventures partner, to lead DiligenceSquaredâs $5 million seed round out of his new VC firm, Relentless.
Instead of relying on expensive management consultants, the startup uses AI voice agents to conduct interviews with customers of the companies the PE firms are considering buying.
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DiligenceSquared is applying the same AI-interview model seen in consumer research startups like Keplar, Outset, and ListenLabs, which in January raised $69 million at a $500 million valuation. But Hansen and Biltoft argue that their due diligence process and final outputs are fundamentally different from the consumer research produced by these startups.
PE firms can pay $500,000 to $1 million for McKinsey, Bain, or BCG to interview dozens of corporate customers, including C-suite executives, and produce 200-page reports synthesizing those insights with proprietary market data, Hansen said. To ensure the quality of the analysis, DiligenceSquared involves senior human consultants who verify the accuracy and commercial insights of the final output.
Since AI is doing a lot of the groundwork, the startup claims it can provide the analysis for just $50,000.
âWe are taking these great insights that were previously reserved for the very big decisions, and now we make them more accessible,â Hansen said. Because of the lower price point, PE firms are now far more willing to engage DiligenceSquared earlier in the process, well before they have high conviction in a deal.
DiligenceSquared isnât the only company trying to disrupt the diligence market. Its main competitor, Bridgetown Research, raised a $19 million Series A co-led by Accel and Lightspeed in February 2026.
In addition to Hansen and Biltoft, DiligenceSquared was co-founded by Harshil Rastogi, a former Google engineer.
