Technical Due Diligence for a Logistics-AI-Startup
The client, a modern venture capital firm with high sustainability standards, commissioned niologic with the technical due diligence of a logistics AI startup prior to a Series A funding. In this context, we reviewed the IT, AI and intellectual property of the technical solutions on behalf of the buying side as well as assumptions on scalability, both technically and based on the business plan.
Challenge
A Seed funding that had taken place previously, led to the anchoring of the company valuation. One objective was therefore to check, within the framework of a Technical Due Diligence, whether the existing value had developed since then and whether any risks identified in the last valuation could be reduced or secured.
Procedure
In several sub-steps of the Technical Due Diligence, niologic first reviewed the IT-Architecture, IT- Development Processes, IT-Security, IT-Roadmap, and Development Teams. In a further step, the Software- Architecture and AI platform were reviewed.
Special attention was paid by niologic to the overlap and coherence of IT roadmap, development history, business plan and assumptions about growth and technologies. The necessity of using AI was questioned, due to its high market impact and infrequent use beyond the advertising effect.
The startup’s Intellectual Property was reviewed, as well as third-party licenses of open-source software included in it. Furthermore, the plans for an expansion of the overall system were checked for plausibility based on theses.
The personnel and technical capabilities of the Development Team were intensively reviewed to determine the proportion of third-party and in-house development. Capabilities for scaling the team with regard to the IT roadmap and the startup’s business plan behind it were also examined.
Results and Customer Value
As part of the Technical Due Diligence, the client received a – Red Flag Report – about the Status Quo and the potential of technical development of the startup. By detailing technical and personnel developments, obstacles as well as debts, an objective picture of the company’s value, development potential and value proposition was presented to the interested investor. The risks contained therein were evaluated according to probability of occurrence and resulting consequences, as a basis for risk management.
In this way, niologic was able to facilitate Decision-Making assuming technological and strategic risks and to provide the client with a holistic overview of all relevant key figures of the potential investment.
