The merger-and-acquisition process is typically lengthy and costly, even for major private equity firms with extensive resources. Beyond the significant time investment required for meetings with senior executives of potential targets and financial modeling, these firms also spend millions on external advisors, including accountants, lawyers, and management consultants. Since these advisory costs are not recoverable if a transaction fails, private equity firms usually delay engaging high-cost specialists—such as consultants from McKinsey, BCG, or Bain for in-depth commercial research—until they are confident in their interest.

DiligenceSquared, a startup from the fall 2025 Y Combinator cohort, asserts that it can deliver commercial research of top consultancy quality at a dramatically lower cost by leveraging artificial intelligence. The co-founders, Frederik Hansen and Søren Biltoft, bring substantial private equity due diligence experience to the venture. Hansen previously served as a principal at Blackstone, where he oversaw such reports for several billion-dollar buyouts, while Biltoft spent seven years leading similar diligence projects within BCG’s private equity practice.

This early promise attracted Damir Becirovic, a former partner at Index Ventures, to lead a $5 million seed investment in DiligenceSquared through his new venture firm, Relentless. Rather than depending on costly management consultants, the startup employs AI voice agents to interview customers of companies being evaluated for acquisition.

DiligenceSquared is adapting an AI-interview approach already used in consumer research by startups like Keplar, Outset, and ListenLabs—the latter of which secured $69 million at a $500 million valuation in January. However, Hansen and Biltoft emphasize that their due diligence methodology and final deliverables are distinct from the consumer research these other companies produce.

According to Hansen, private equity firms might pay between $500,000 and $1 million for firms like McKinsey, Bain, or BCG to conduct interviews with dozens of corporate customers—including C-suite executives—and compile detailed 200-page reports that integrate those insights with proprietary market data. To maintain analytical rigor, DiligenceSquared incorporates senior human consultants who review and validate the accuracy and commercial insights of the final output.

By using AI to handle much of the foundational work, the startup states it can offer comparable analysis for approximately $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 explained.

This reduced cost makes private equity firms much more inclined to engage DiligenceSquared earlier in the evaluation process, well before they have reached a high level of certainty about a potential deal.

DiligenceSquared is not alone in seeking to innovate within the due diligence sector. Its primary competitor, Bridgetown Research, closed a $19 million Series A round in February 2026, co-led by Accel and Lightspeed. In addition to Hansen and Biltoft, the startup was co-founded by Harshil Rastogi, a former engineer at Google.