StartupFuel, a Canada-based AI due diligence company, has launched DiligenceGPT, a tool designed to help venture capital firms address AI misinformation and bias in due diligence for African startups.
The AI-powered tool helps VC firms to sift through and analyse large datasets provided by founders and compare them against industry standards and public data. DiligenceGPT will provide investors with risk ratings, relevancy fit, and data integrity scores to guide their funding decisions.
“There is no doubt that there is a rise in talent, so [DiligenceGPT] aims to empower local entrepreneurs in Africa, helping them expand their reach, attract investment, and ultimately contribute to sustainable economic development in the continent,” the company said.
StartupFuel has collaborated with World Bank’s International Finance Corporation (IFC) with a focus on emerging markets, by championing a fair and unbiased evaluation ecosystem. This approach seeks to unlock significant growth opportunities and enable African founders to access funding and resources.
Self-described as the “LinkedIn and Bloomberg for VC,” StartupFuel provides due diligence insights on startups on its directory list and presents them as an “SAT” score to investors. This score is benchmarked against their business model and market, traction, barriers, competitors, and financials to help founders select their winners.
“DiligenceGPT is our commitment to reducing bias, providing greater transparency, and utilising AI to enhance the current process,” said Ashley Martis, StartupFuel CEO.
AI misinformation contributes to funding biases. Large language models (LLMs) make it easier to manipulate data about market sizes and serviceable markets in different industries, for instance. Inaccurate or incomplete information provided to these investors can slip through unnoticed, creating challenges for them and sometimes, skewing investment decisions.
“The industry is ranked with subjective biases, and a growing need to validate large amounts of private data that can be incorrect, exaggerated, and/or molded to tell a false narrative,” the company said in a statement.
Founded by Ashley Martis in 2019, StartupFuel offers AI-driven solutions for venture capital. In 2020, the company raised an undisclosed amount of funding, according to Crunchbase.
StartupFuel has also expanded through strategic acquisitions. In 2019, it acquired Startifi, a social network for startups, and in 2021, acquired Uncrowd.io, a platform supporting underrepresented founders. It counts Techstars and Village Capital as clients.
The AI startup faces stiff competition from more established players in venture capital due diligence, such as Crunchbase and Tracxn, which offer similar deal flow analysis tools for investors.
Yet, StartupFuel is betting on its technology. The AI startup has trademarked its DiligenceGPT tool and filed a patent awaiting approval, to build a moat on the technology aspect of its operations.
Editor’s note: This article has been update to correct StartupFuel’s founding year, investors and included an additional paragraph.
