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 like accountants, lawyers, and management consultants.
Since expenses for external advisers are not reimbursed if a deal falls through, private equity firms wait until they are certain of their interest before engaging costly specialists from firms like McKinsey, BCG, or Bain to perform extensive commercial research on the market and the target company.
DiligenceSquared, a startup that was part of Y Combinator’s 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 startup’s 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. Biltoft spent seven years in BCG’s private equity practice leading these types of diligence efforts.
Since launching in October, their industry experience has helped DiligenceSquared complete multiple projects for several of the world’s largest private equity firms and mid-market funds.
That early traction convinced Damir Becirovic, a former Index Ventures partner, to lead DiligenceSquared’s five million dollar seed round out of his new venture capital firm, Relentless.
Instead of relying on expensive management consultants, the startup uses AI voice agents to conduct interviews with customers of the companies the private equity firms are considering buying.
DiligenceSquared is applying the same AI-interview model seen in consumer research startups, but the founders argue that their due-diligence process and final outputs are fundamentally different from the consumer research produced by those companies.
Private equity firms can pay five hundred thousand to one million dollars for a major consultancy to interview dozens of corporate customers, including C-suite executives, and produce two-hundred-page reports synthesizing those insights with proprietary market data. To ensure quality, 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 fifty thousand dollars. This lower price point makes the insights, previously reserved for only the biggest decisions, far more accessible. As a result, private equity firms are now far more willing to engage DiligenceSquared earlier in the process, well before they have high conviction in a deal.
DiligenceSquared is not the only company trying to disrupt the diligence market. Its main competitor raised a nineteen million dollar Series A in February 2026. In addition to Hansen and Biltoft, DiligenceSquared was co-founded by Harshil Rastogi, a former Google engineer.