DiligenceSquared Raises $5M to Let AI Do What McKinsey Charges $1M For

A startup founded by alumni of Blackstone, BCG, and Google has closed a seed round to automate one of private equity’s most expensive and least-changed workflows. The round was led by RELENTLESS, with Y Combinator participating.

Commercial due diligence is one of the most standardized, most expensive, and least-digitized workflows in private equity. A single report from McKinsey, BCG, or Bain can cost between $500,000 and $1 million. It is built largely the same way it was decades ago: expert interviews, manual synthesis, a static PowerPoint at the end. DiligenceSquared was built to dismantle that model.

The New York-based startup closed a $5 million seed round on March 7, led by RELENTLESS with participation from Y Combinator. The funding will go toward expanding the platform and meeting what the company describes as rapidly growing demand from private equity firms across the US and Europe.

CEO Frederik Hansen spent six years at Blackstone, rising to Principal on the private equity team, where he was on the buying side of commercial due diligence, the one commissioning those $500,000 to $1 million reports. COO Søren Biltoft spent seven years as a Principal in BCG’s Private Equity practice, leading those same reports for blue-chip PE and hedge fund clients. CTO Harshil Rastogi comes from a decade at Google, most recently leading AI systems for fraud and abuse detection in the Ads division. The three of them together cover the buyer, the seller, and the builder.

Commercial due diligence hasn’t changed in decades. It’s highly standardized work, executed manually, and sold at a massive markup.
Frederik Hansen, Co-Founder & CEO, DiligenceSquared

The platform automates the full due diligence workflow, from scoping the research brief through to an interactive report where every insight is traceable back to its original source. AI voice agents conduct multilingual interviews with customers, competitors, and market insiders in parallel, eliminating the scheduling bottleneck that makes traditional expert interviews slow and expensive. Human consultants with senior PE and consulting backgrounds review outputs before delivery. The result, the company says, is something that produces the rigour of a traditional consulting product at a fundamentally different cost and speed.

Biltoft was direct about where the line sits between AI and human judgment in the model: “Investors won’t adopt tools that are 80–90% correct. Our model automates the heavy lifting while keeping human judgment exactly where it’s needed.”

Since launching in October 2025, DiligenceSquared has completed engagements with private equity and mid-market funds representing over $2 trillion in combined assets under management. The investor base beyond RELENTLESS and Y Combinator includes Amino Capital, Founder Factor, Multimodal Ventures, Twenty Two Ventures, and a group of angel investors.

The category they are targeting has not seen meaningful innovation in decades. Commercial due diligence is repeatable, structured, and document-heavy, mainly the kind of work that AI systems are increasingly well-suited to handle. The $5 million raised is seed capital, but the market they are going after is not small. Every major buyout deal requires one of these reports. DiligenceSquared is betting that the $500,000 version is on borrowed time.

This article is based on a press release issued by DiligenceSquared on March 7, 2026. Quotes are reproduced directly from the release. NervNow has not independently verified the company’s client or AUM figures.

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