Capsa AI, a startup transforming due diligence in private equity, has announced a seed funding round of €2 million. The funding round was led by Outward VC with participation from Cornerstone VC and Antler. The round also included contributions from high profile angel investors such as Chris Adelsbach, as well as senior professionals from leading private equity firms and tech unicorns.
The seed funding round was closed just eight months after Capsa AI was founded. In that time, Capsa AI has already become revenue-generating, serving leading PE funds managing over $30 billion across the US, UK, and Germany.
Capsa AI has developed an AI operating system that allows investors at private equity funds to ‘delegate’ the manual, low-skill due diligence tasks that traditionally take up to 25% of their time. These tasks include activities such as the creation of company profiles, extraction and consolidation of financial information from company records, analysis of financial performance and reviewing customer contracts.
Danyal Özdüzenciler, the co-founder of Capsa AI, commented: “Capsa AI has received such a positive reaction from investors and customers alike because we are using AI to address a clear and pressing challenge in one of the world’s biggest industries. We are already driving productivity and efficiency in major PE firms and I have every confidence that we can build a product which will transform collaboration, knowledge sharing and decision making in private equity and private capital worldwide.”
Better investment decisions
The Capsa AI technology allows PE investors to focus on more valuable and critical tasks, increasing their bandwidth to look at more potential deals and spend more time on value creation. In the coming months Capsa AI will help private equity funds leverage their historical deal data in order to make better investment decisions.
Since launching their product, Capsa AI has co-developed PE specific features with multiple leading PE funds. On average, their early customers have reported a due-diligence time-saving of 20%, and went on to give a 90% customer satisfaction score. Customers cited Capsa AI’s careful consideration of PE-specific workflows and requirements as being a key differentiator from other AI tools.
The capital raised will be used to build out the team, focused particularly on hiring product engineering talent to develop more features for private equity investors. The funding will also be used to penetrate target markets and build out proprietary AI models.
Sanchit Dhote, Principal at Outward VC, said: “The Capsa AI team has developed a groundbreaking solution that is fundamentally reshaping how private equity firms approach due diligence. With private markets experiencing tremendous growth over the past decade, the volume and complexity of data for due diligence has grown exponentially. Capsa is at the forefront of driving the adoption of AI technologies in the PE industry. We are confident that Capsa AI will become the essential infrastructure for managing private assets.”
Rodney Appiah, Managing Partner at Cornerstone VC, added: “In a short period of time, Danyal and Callum have created a product that has caught the attention of the private equity sector, harnessing the benefits of AI whilst maintaining flexibility and control over how it is deployed in internal workflows. Their long term ambition to unlock the value of unstructured data within the private markets industry is something that excites us and one we see great potential for going forward. We are delighted to be part of their round and look forward to working with the team as they seek to scale Capsa AI in the coming years.”
