Background

Merger‑and‑acquisition (M&A) processes are traditionally time‑consuming and expensive, even for large private‑equity (PE) firms. Companies often spend millions on external advisers—accountants, lawyers, and management consultants—whose fees are not reimbursed if a deal falls through. As a result, PE firms typically wait until they have high conviction before engaging costly consultants such as McKinsey, BCG, or Bain for commercial research.

Technology and Approach

DiligenceSquared, a startup that emerged from Y Combinator’s Fall 2025 cohort, leverages artificial intelligence and voice agents to conduct interviews with customers of potential acquisition targets. Co‑founders Frederik Hansen, a former Blackstone principal, and Søren Biltoft, who spent seven years in BCG’s private‑equity practice, bring deep industry expertise to the venture. The AI system gathers extensive primary data, while senior human consultants review the output to ensure accuracy and commercial relevance. This hybrid model allows the company to produce consultant‑grade, 200‑page reports for roughly $50,000, compared with $500,000 to $1 million charged by top consulting firms.

Market Impact

The lower price point encourages PE firms to engage DiligenceSquared earlier in the deal pipeline, before they have firm conviction in a transaction. By making high‑quality commercial insights more accessible, the startup aims to democratize due‑diligence resources that were previously reserved for only the largest deals. Early traction includes multiple projects for several of the world’s biggest PE firms and mid‑market funds.

Funding and Competition

The company secured a $5 million seed round, led by Damir Becirovic of Relentless, a new VC firm formed by a former Index Ventures partner. DiligenceSquared’s main competitor, Bridgetown Research, raised a $19 million Series A co‑led by Accel and Lightspeed in early 2026. Other consumer‑research AI startups such as Keplar, Outset, and Listen Labs have pursued similar interview‑based models, but DiligenceSquared positions its output as fundamentally different, focusing on the depth required for M&A decisions.

Used: News Factory APP - news discovery and automation - ChatGPT for Business