The process of mergers and acquisitions is inherently protracted and costly, even for the most well-resourced private equity firms. Beyond the extensive time invested in engaging with senior executives of prospective targets and developing financial models, these organizations allocate millions to external experts, including accountants, legal counsel, and management consultants.
Given that fees for external advisors are non-recoverable should a deal not materialize, private equity firms typically defer engaging high-cost specialists, such as consultants from esteemed firms like McKinsey, BCG, or Bain, for comprehensive commercial research on markets and target companies until their interest is firmly established.
Enter DiligenceSquared, a startup from YC’s fall 2025 cohort, which asserts its ability to deliver premium, consultancy-grade commercial research leveraging artificial intelligence, all at a significantly reduced cost compared to conventional methods.
The company's co-founders, Frederik Hansen and Søren Biltoft, bring extensive experience in private equity due diligence. Hansen previously served as a principal at Blackstone, where he was responsible for commissioning such reports for numerous billion-dollar acquisitions. Biltoft, conversely, dedicated seven years to BCG's private equity practice, spearheading similar diligence initiatives.
Since its launch in October, the combined industry acumen of Hansen and Biltoft has enabled DiligenceSquared to successfully execute multiple projects for some of the world’s leading private equity firms and mid-market funds, as Hansen disclosed to TechCrunch.
This initial market validation proved compelling enough for Damir Becirovic, previously a partner at Index Ventures, to spearhead DiligenceSquared’s $5 million seed funding round through his newly established venture capital firm, Relentless.
Rather than engaging costly management consultants, the startup employs AI-powered voice agents to conduct interviews directly with customers of target companies under consideration by private equity firms.
DiligenceSquared’s approach to AI-driven interviews mirrors models utilized by consumer research startups such as Keplar, Outset, and ListenLabs – the latter having secured $69 million at a $500 million valuation in January. However, Hansen and Biltoft emphasize that their due diligence methodology and the resulting deliverables are distinctly different from the consumer research outputs generated by these companies.
Hansen explained that private equity firms typically incur costs between $500,000 and $1 million for leading consultancies like McKinsey, Bain, or BCG to interview dozens of corporate clients, including C-suite executives, and generate comprehensive 200-page reports integrating these insights with proprietary market data. To uphold analytical rigor, DiligenceSquared incorporates senior human consultants who meticulously validate the accuracy and commercial relevance of the final deliverables.
With AI handling a significant portion of the foundational research, the startup states it can deliver comparable analysis for a mere $50,000.
“We are taking these great insights that were previously reserved for the very big decisions, and now we make them more accessible,” Hansen commented. This more accessible price point encourages private equity firms to engage DiligenceSquared much earlier in their evaluation process, often prior to developing high conviction in a potential transaction.
DiligenceSquared is not alone in its endeavor to innovate the diligence market. Its primary competitor, Bridgetown Research, notably secured a $19 million Series A funding round co-led by Accel and Lightspeed in February 2026.
Rounding out the founding team alongside Hansen and Biltoft is Harshil Rastogi, a former Google engineer.
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