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Dili: Using AI to Help Automate Due Diligence and Portfolio Management for Investors

Image Credits: iStock.com/YumiMini
By: Headliners News / February 21, 2024

Meet Dili, a Y Combinator graduate, aims to automate key investment due diligence and portfolio management steps for private equity and venture capital firms using artificial intelligence (AI). Founded by Stephanie Song, Brian Fernandez, and Anand Chaturvedi, this FinTech platform seeks to streamline the due diligence process by leveraging AI to automate tasks such as parsing databases of private company data, handling due diligence request lists, and extracting relevant information from large unstructured documents.

Dili uses its proprietary technology called GenAI, which includes large language models similar to OpenAI’s ChatGPT, to deliver high accuracy on specific tasks like extracting financial metrics from unstructured documents. The platform first catalogs a fund’s historical financial data and investment decisions in a knowledge base and then applies AI models to automate various due diligence tasks. Dili claims to use “first-of-its-kind” technology, with custom indexing and retrieval pipelines tuned for specific documents.

The platform also recently added support for automated comparable analysis and industry benchmarking. Funds can upload their deal data, allowing them to compare historical and current investment opportunities in one place. Dili aims to provide an efficient and accurate solution for funds looking to gain a differentiated edge on decision-making, especially in a challenging macro environment where funds are seeking ways to make their teams more efficient and reduce operating costs.

While AI in the due diligence process is not new, Dili believes it has a unique opportunity to emerge as a solution for funds by combining AI with a wealth of data to enhance decision-making. However, concerns about the accuracy of AI models and potential biases remain, and Dili acknowledges the need to fine-tune its models to reduce instances of inaccuracy and hallucination.

As Dili expands its team and capabilities, the startup aims to become an “end-to-end” solution for investor due diligence and portfolio management, with a vision to apply its core technology to various parts of the asset allocation process. The platform is seeking to address several pressing challenges faced by investment professionals in funds by offering them a more efficient and data-driven approach to due diligence in the private equity and venture capital space.

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