AI-Powered Startup DiligenceSquared Democratizes M&A Research, Secures $5M Seed

Key Takeaways

• DiligenceSquared secured a $5 million seed round led by Relentless VC.
• The startup utilizes AI voice agents to conduct customer interviews for M&A due diligence.
• DiligenceSquared aims to provide consultancy-quality research at a fraction of the cost of traditional firms like McKinsey and BCG.
• This lower price point enables PE firms to engage in diligence earlier in the deal-making process.
• The company faces competition from Bridgetown Research, which recently raised a $19 million Series A.

The world of mergers and acquisitions (M&A) is notoriously complex and expensive, often requiring significant investment in external advisors. Private equity (PE) firms routinely spend substantial sums on consultants, lawyers, and accountants to thoroughly assess potential acquisitions. DiligenceSquared, a startup born from Y Combinator's Fall 2025 cohort, is poised to disrupt this established order by offering AI-driven due diligence at a vastly reduced price.

Founded by Frederik Hansen, a former principal at Blackstone, and Søren Biltoft, previously with BCG's private equity practice, DiligenceSquared brings deep expertise to the table. Their firsthand experience commissioning and leading due diligence efforts for billion-dollar buyouts gives them a unique understanding of the market's pain points.

The company's core innovation lies in its use of AI voice agents to conduct interviews with customers of target companies. This approach, similar to that used by consumer research startups, allows DiligenceSquared to gather crucial market insights more efficiently and cost-effectively than traditional consulting methods. While acknowledging competition from firms such as Bridgetown Research, DiligenceSquared emphasizes the distinct nature of its due diligence process and the quality of its final outputs.

According to Hansen, PE firms often pay between $500,000 and $1 million for traditional consulting firms to conduct extensive customer interviews and produce comprehensive reports. DiligenceSquared claims it can deliver comparable analysis for around $50,000, a significant cost saving. To ensure accuracy and quality, senior human consultants are involved in verifying the AI-generated insights.

The early traction DiligenceSquared has gained, including completing multiple projects for major PE firms, convinced Damir Becirovic, a former Index Ventures partner, to lead the company's $5 million seed round through his new VC firm, Relentless. This funding will enable DiligenceSquared to further develop its AI platform and expand its reach within the private equity market.

In addition to Hansen and Biltoft, Harshil Rastogi, a former Google engineer, is a co-founder of DiligenceSquared, bringing further technical expertise to the team.

Why it matters

DiligenceSquared's AI-powered approach has the potential to democratize M&A research, making it more accessible to a wider range of PE firms. By significantly reducing the cost of due diligence, the startup could empower firms to conduct more thorough assessments earlier in the deal-making process, leading to better investment decisions and potentially reducing the risk of failed acquisitions. This shift could also challenge the dominance of traditional consulting firms in the M&A space, forcing them to adapt to the changing landscape of AI-driven research.