DiligenceSquared raises $5 million to automate M&A due diligence

DiligenceSquared, a startup that launched in October, has raised a $5 million seed round led by venture capital firm Relentless to automate M&A due diligence—the research process performed by investors before buying a company. The funding round was led by Damir Becirovic, a former Index Ventures partner who recently launched Relentless. DiligenceSquared was co-founded by Frederik Hansen, a former principal at Blackstone; Søren Biltoft, who spent seven years in BCG’s private equity practice; and Harshil Rastogi, a former Google engineer. The startup uses AI voice agents to conduct interviews with customers of companies that private equity firms—investment firms that buy and restructure companies—are considering purchasing.

Traditionally, private equity firms wait until they have high conviction in a transaction before hiring management consultants to perform commercial research, as these expenses are not reimbursed if a deal falls through. DiligenceSquared claims its AI-driven approach can significantly lower these barriers.

• Traditional consultancy: Private equity firms typically spend $500,000 to $1 million on consultants from firms like McKinsey, Bain, or BCG to conduct interviews and produce a 200-page report.
• DiligenceSquared: The startup claims it can provide the analysis for just $50,000.

To ensure the quality of its automated research, DiligenceSquared involves senior human consultants who verify the accuracy and commercial insights of the final output. “We are taking these great insights that were previously reserved for the very big decisions, and now we make them more accessible,” said co-founder Frederik Hansen. Because of the lower price point, the startup claims private equity firms are more willing to engage its services earlier in the deal process. Since its launch, DiligenceSquared has completed multiple projects for several of the world’s largest PE firms and mid-market funds.

The startup enters a competitive market of AI-driven research tools. In the consumer research space, peer startups like Keplar, Outset, and Listen Labs are applying similar AI-interview models; Listen Labs secured $69 million in funding at a $500 million valuation in January. However, DiligenceSquared’s founders argue that their due diligence process and outputs are fundamentally different from consumer research. Within the M&A diligence market specifically, DiligenceSquared competes with Bridgetown Research, which raised a $19 million Series A round co-led by Accel and Lightspeed in February 2026.

Why it matters

DiligenceSquared is using AI voice agents to lower the cost of M&A due diligence, allowing private equity firms to engage research earlier in the deal process.