DiligenceSquared Launches AI Platform to Cut Private Equity Due Diligence Costs by up to $1 Million Per Report

San Francisco – DiligenceSquared, a new Y Combinator-backed startup, has officially launched its AI-powered market due diligence platform, aiming to significantly reduce the costs and time associated with investment decisions for private equity funds. The company's launch was recently celebrated by Y Combinator, which posted on social media, "> Congrats on the launch, @SorenBiltoft, @harshil93r, and @FredKHansen!"

The startup addresses a critical pain point in the private equity sector, where funds typically spend between $500,000 and $1 million on market due diligence reports from consulting firms like McKinsey, BCG, and Bain. These traditional reports are often static, take weeks to produce, and lack auditable sources. DiligenceSquared promises to deliver comparable insights at a fraction of the cost, leveraging advanced artificial intelligence.

DiligenceSquared's innovative approach utilizes AI agents to conduct expert interviews and synthesize insights, with every claim meticulously linked to source transcripts. This method eliminates the "black box" nature of conventional reports, offering auditable results and enhanced transparency for investment firms. The company emphasizes a data-driven process that bypasses the manual labor and inherent delays of human-intensive research.

Despite its recent launch as part of the Y Combinator Fall 2025 (YC F25) batch, DiligenceSquared has already secured significant traction within the industry. The company is currently working with two of the world's five largest private equity funds, alongside several mid-market funds. Potential clients using their platform represent approximately 60% of the top-30 private equity funds globally, indicating strong market demand.

The founding team brings substantial industry expertise to the venture. Søren Biltoft-Knudsen, Co-Founder and President, previously served as a Principal at BCG, while Frederik Kofoed Hansen, Co-Founder and CEO, was a Principal at Blackstone Private Equity. Harshil Rastogi, a repeat founder and former Software Engineer at Google, completes the leadership trio, combining deep financial and technological knowledge to disrupt the $10 billion annual market for due diligence.