A startup based in Canada, specialized in AI due diligence, has introduced DiligenceGPT, a tool created to assist venture capital firms in combating AI misinformation and bias during the due diligence process for African startups.
The tool, powered by AI, aids VC firms in sorting through and examining large datasets provided by founders, comparing them to industry standards and public data. DiligenceGPT will supply investors with risk ratings, relevancy fit, and data integrity scores to aid in their funding decisions.
“There is a noticeable increase in talent, and therefore, [DiligenceGPT] is intended to empower local entrepreneurs in Africa by assisting them in expanding their outreach, attracting investment, and ultimately contributing to sustainable economic growth in the continent,” the company expressed.
Describing themselves as the “LinkedIn and Bloomberg for VC,” StartupFuel offers due diligence insights on startups within its directory list, presenting them with an “SAT” score to investors. This score is compared against their business model and market, traction, barriers, competitors, and financials to assist founders in selecting potential winners.
“DiligenceGPT is our pledge to diminish bias, enhance transparency, and leverage AI to improve the current process,” stated Ashley Martis, CEO of StartupFuel.
AI misinformation plays a role in funding biases. Large language models (LLMs) can manipulate data regarding market sizes and serviceable markets across various industries. Incorrect or incomplete information presented to investors can go unnoticed, posing challenges for them and sometimes leading to skewed investment decisions.
“The industry is filled with subjective biases and an increasing necessity to verify substantial amounts of private data that may be inaccurate, exaggerated, and/or shaped to convey a false narrative,” the company added in a statement.
Established by Ashley Martis in 2017, StartupFuel provides an AI-driven solutions market for venture capital. In 2020, the company secured an undisclosed amount of funding in a round led by ID8 Investments, with participation from Aurum Holdings, according to internal records.
StartupFuel has extended its reach through strategic acquisitions. In 2019, it obtained Startifi, a social network for startups, and in 2021, it acquired Uncrowd.io, a platform supporting underrepresented founders. Techstars and Village Capital are among its clientele.
The AI startup faces tough competition from more established players in venture capital due diligence, such as Crunchbase and Tracxn, which provide similar deal flow analysis tools for investors.
Nevertheless, StartupFuel is banking on its technology. The AI startup has trademarked its DiligenceGPT tool and has a pending patent approval to fortify its position in the technology aspect of its operations.