How does DiligenceSquared ensure its AI-driven reports match the quality of those from top-tier consulting firms?

The company uses a human-in-the-loop approach. While AI voice agents conduct the initial interviews and groundwork, senior human consultants with industry experience are responsible for verifying the accuracy and commercial insights of the final analysis before it is delivered to the client.

DiligenceSquared uses AI, voice agents to make M&A research affordable

DiligenceSquared, a startup aiming to slash the cost of M&A research for private equity firms, has secured a $5 million seed round. Led by Damir Becirovic’s new VC firm, Relentless, the funding will help the YC alum expand its service that uses AI to automate commercial due diligence, a process traditionally dominated by high-cost consulting firms. The company's value proposition is to make deep market and target company analysis accessible much earlier in the investment process, before firms commit to multi-million dollar advisory fees.

Co-founders Frederik Hansen, formerly a principal at Blackstone, and Søren Biltoft, a veteran of BCG’s private equity practice, are leveraging AI voice agents to conduct in-depth interviews with the customers of potential acquisition targets. While a typical report from McKinsey, BCG, or Bain can cost between $500,000 and $1 million, DiligenceSquared offers its analysis for approximately $50,000. To maintain quality, the startup employs senior human consultants to verify the AI-generated insights and ensure the accuracy of the final reports delivered to clients.

By drastically lowering the price, DiligenceSquared is enabling PE firms to conduct thorough diligence on deals where they have lower initial conviction. This model mirrors a trend seen in AI-driven consumer research but applies it to the high-stakes, specialized world of corporate M&A. The market for disrupting due diligence is attracting significant investor interest, with competitor Bridgetown Research having raised a $19 million Series A earlier this year. The early traction DiligenceSquared has gained with major PE funds suggests a strong appetite for more efficient alternatives to legacy consulting engagements.

DiligenceSquared's model is less about replacing human consultants outright and more about unbundling the diligence process. By using AI to automate the costly data collection phase, it allows human experts to focus on the higher-value tasks of synthesis and strategic analysis, effectively productizing a niche consulting service.