AI-Driven M&A Research: Revolutionizing DiligenceSquared’s Affordable Solutions

A Revolutionary Approach to Private Equity Due Diligence

A typical merger-and-acquisition process can be a lengthy and costly endeavor, especially for large private equity firms with ample resources. These firms invest significant time and money into meeting with key executives of potential targets and analyzing financial projections. Moreover, they allocate millions of dollars towards engaging external advisers such as accountants, lawyers, and management consultants.

Given that expenses for external advisers are non-refundable if a deal falls through, private equity firms are cautious in enlisting the services of costly specialists like McKinsey, BCG, or Bain. They typically wait until they are certain of their interest before commissioning extensive commercial research on the market and the target company.

DiligenceSquared, a cutting-edge startup that emerged from Y Combinator’s Fall 2025 cohort, claims to offer consultancy-quality commercial research using AI technology at a fraction of the traditional cost.

The company’s co-founders, Frederik Hansen and Søren Biltoft, bring a wealth of experience in private equity due diligence. Hansen, a former principal at Blackstone, and Biltoft, who spent years at BCG’s private equity practice, have leveraged their industry expertise to successfully complete numerous projects for major PE firms since the startup’s launch in October.

Such early success led Damir Becirovic, a former partner at Index Ventures, to lead DiligenceSquared’s $5 million seed funding round through his new venture capital firm, Relentless.

Instead of relying on expensive management consultants, DiligenceSquared utilizes AI voice agents to conduct interviews with customers of potential acquisition targets, a method that sets them apart in the due diligence landscape.

By employing an AI-interview model reminiscent of consumer research startups like Keplar, Outset, and Listen Labs, DiligenceSquared aims to provide a unique due diligence process that differs from standard consumer research practices.

While traditional firms may pay substantial sums for extensive customer interviews and comprehensive reports, DiligenceSquared claims to deliver high-quality analysis at a fraction of the cost, thanks to AI technology.

“We are democratizing valuable insights that were previously reserved for major decisions, making them more accessible to a wider audience,” Hansen explained. The affordability of their services has enticed PE firms to engage with DiligenceSquared earlier in the deal-making process, even before full certainty is reached.

While DiligenceSquared is making waves in the diligence market, it faces competition from Bridgetown Research, its main rival, which secured a $19 million Series A funding round co-led by Accel and Lightspeed in February 2026.

In addition to Hansen and Biltoft, the brains behind DiligenceSquared include Harshil Rastogi, a former Google engineer, further enhancing the company’s technological edge.