The typical merger and acquisition process is time-consuming and expensive, even for large and well-resourced private equity firms. In addition to spending countless hours meeting with potential targets’ senior executives and modeling their financial results, these groups spend millions of dollars on outside advisors such as accountants, lawyers and management consultants.
Because fees for external advisors are not reimbursed if a deal falls through, PE firms wait until their interest is certain before hiring costly experts, such as consultants from McKinsey, BCG or Bain, to conduct extensive commercial research on the market and the target company.
DiligenceSquared, a startup participating in YC’s Fall 2025 cohort, says that with the help of AI, it can deliver top-tier consulting-level commercial research at a fraction of the traditional cost.
The startup’s co-founders, Frederik Hansen and Søren Biltoft, have deep expertise in private equity due diligence. Hansen previously served as a principal at Blackstone, where he commissioned reports on multibillion-dollar acquisitions. Meanwhile, Biltoft spent seven years leading these types of due diligence efforts in BCG’s private equity practice.
Since launching last October, Hansen and Biltoft’s industry experience has helped DiligenceSquared complete several projects for several of the world’s largest PE firms and mid-market funds, Hansen told TechCrunch.
This early traction led former Index Ventures partner Damir Becirovic to lead DiligenceSquared’s $5 million seed round at his new VC firm, Relentless.
Instead of relying on expensive management consultants, startups use AI voice agents to interview customers of companies that PE firms are considering acquiring.
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DiligenceSquared is applying the same AI interview model found in consumer research startups like Keplar, Outset, and Listen Labs. The model raised $69 million in January at a valuation of $500 million. But Hansen and Biltoft argue that their due diligence process and end result are fundamentally different from the consumer research these startups produce.
A PE firm can pay McKinsey, Bain or BCG $500,000 to $1 million to interview dozens of corporate clients, including top executives, and synthesize those insights with proprietary market data to produce a 200-page report, Hansen said. To ensure the quality of the analysis, DiligenceSquared engages senior human consultants who verify the accuracy and commercial insight of the final output.
With AI doing much of the groundwork, the startup claims it can provide analytics for just $50,000.
“We’re leveraging great insights that were previously reserved for very important decisions, and now we’re making them more accessible,” Hansen said. Because the price is lower, PE firms are now much more willing to engage with DiligenceSquared earlier in the process, long before they have high confidence in the deal.
DiligenceSquared isn’t the only company looking to disrupt the diligence market. Its main competitor, Bridgetown Research, raised $19 million in Series A funding in February 2026, co-led by Accel and Lightspeed.
In addition to Hansen and Biltoft, DiligenceSquared was co-founded by Harshil Rastogi, a former Google engineer.
