In the realm of private equity, the merger-and-acquisition process is a complex and costly endeavor. From extensive meetings with key executives to financial modeling, private equity firms invest significant time and resources into vetting potential targets. One major expense in this process is the hiring of external advisers such as accountants, lawyers, and consultants, which can amount to millions of dollars.
However, a promising startup called DiligenceSquared, born out of Y Combinator’s Fall 2025 cohort, aims to revolutionize this costly aspect of the due diligence process. Co-founded by Frederik Hansen and Søren Biltoft, both seasoned experts in private equity due diligence, DiligenceSquared leverages AI technology to offer top-tier consultancy-quality commercial research at a fraction of the traditional cost.
With a wealth of experience from their time at Blackstone and BCG, respectively, Hansen and Biltoft have successfully completed multiple projects for some of the world’s largest private equity firms since launching DiligenceSquared in October. This early success led to a $5 million seed round led by former Index Ventures partner Damir Becirovic through his new VC firm, Relentless.
Unlike traditional methods that rely on costly human consultants, DiligenceSquared utilizes AI voice agents to conduct interviews with customers of target companies. By employing a similar AI-interview model used in consumer research startups like Keplar and Outset, DiligenceSquared offers a unique approach to due diligence that sets it apart from competitors.
While firms typically pay exorbitant fees for consulting giants like McKinsey and Bain to conduct customer interviews and produce detailed reports, DiligenceSquared claims to deliver the same level of analysis for a fraction of the cost. By streamlining the process through AI technology, the startup is able to provide thorough commercial insights at a significantly lower price point, making it more accessible for PE firms to engage earlier in the deal-making process.
While DiligenceSquared faces competition from companies like Bridgetown Research, the startup’s innovative approach and experienced team, including co-founder Harshil Rastogi, a former Google engineer, position it as a disruptive force in the diligence market.
In a landscape where traditional methods can be time-consuming and expensive, DiligenceSquared’s AI-driven approach offers a more efficient and cost-effective solution for private equity firms seeking thorough commercial research. As the startup continues to gain traction and solidify its place in the industry, it is poised to revolutionize the way due diligence is conducted in the world of mergers and acquisitions.
