A typical merger and acquisition process is time-consuming and costly, even for the largest and best-staffed private equity firms. In addition to spending countless hours meeting with senior executives of potential targets and modeling financial results, these groups spend millions of dollars on outside advisors: accountants, lawyers and management consultants.
Because external advisor fees are not refunded if a deal fails, private equity firms wait until they are sure of their interest before bringing in expensive specialists such as consultants from McKinsey, BCG or Bain to carry out in-depth business research on the target market and company.
DiligenceSquared, a startup that was part of YC’s Fall 2025 cohort, claims that with the help of AI, it can provide top-notch consulting-quality business 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 was previously a director at Blackstone, where he commissioned these reports for multibillion-dollar buyouts. At the same time, Biltoft spent seven years in BCG’s private equity department, leading these types of diligence efforts.
Since its launch in October, Hansen and Biltoft’s industry experience has helped DiligenceSquared deliver multiple projects for several of the world’s largest private equity firms and mid-market funds, Hansen told TechCrunch.
This early traction convinced Damir Becirovic, a former partner at Index Ventures, to lead DiligenceSquared’s $5 million seed round for his new venture capital firm, Relentlessly.
Instead of relying on expensive management consultants, the startup uses AI voice agents to conduct customer interviews at companies that private equity firms are considering buying.
Techcrunch event
San Francisco, California | October 13-15, 2026
DiligenceSquared applies the same AI interview model used at consumer research startups like Keplar, Outset and Listening laboratorieswhich raised $69 million in January at a valuation of $500 million. But Hansen and Biltoft say their due diligence process and end results are fundamentally different from the consumer research done by these startups.
Private equity firms can pay between $500,000 and $1 million to have McKinsey, Bain or BCG interview dozens of corporate clients, including senior executives, and produce 200-page reports synthesizing that information with proprietary market data, Hansen said. To ensure the quality of the analysis, DiligenceSquared uses senior human consultants who check the final result for accuracy and business perspective.
Since AI does much of the groundwork, the startup claims it can provide the analysis for as little as $50,000.
“We’re taking this valuable information that was previously reserved for very big decisions, and we’re now making it more accessible,” Hansen said. Due to the lower price point, private equity firms are now much more willing to engage DiligenceSquared earlier in the process, well before they have high conviction in a transaction.
DiligenceSquared is not the only company trying to disrupt the diligence market. Its main competitor, Search in Bridgetownraised a $19 million Series A round co-led by Accel and Lightspeed in February 2026.
Besides Hansen and Biltoft, DiligenceSquared was co-founded by Harshil Rastogi, a former Google engineer.
Marina Temkin is a venture capital and startups reporter at TechCrunch. Before joining TechCrunch, she wrote about venture capital for PitchBook and Venture Capital Journal. Earlier in her career, Marina was a financial analyst and earned her CFA designation.
You can contact or check Marina’s outreach by sending an email marina.temkin@techcrunch.com or via encrypted message at +1 347-683-3909 on Signal.
