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Codense
Investment · 2024

Technical due diligence that changed the price

Three weeks inside a marketplace codebase ahead of a Series B, and a written assessment the investment committee could actually act on.

Turnaround
3 weeks
Findings that blocked the plan
2 of 31
Remediation priced at
14 engineer-months
Outcome
Deal repriced, then closed

The situation

The fund was late in a competitive process with limited access to the target's engineering team. They needed to know two things: whether the platform could carry the growth plan it was being valued on, and what it would cost to fix whatever was in the way.

What we did

We read the code, the pipeline, the incident history and the last two years of pull requests — the last of these being the most honest document in any company. We modelled the growth plan against the actual architecture to find where it would break, and priced the remediation in engineer-months rather than adjectives. Every finding was ranked by likelihood and cost, and separated cleanly into things that block the plan and things that are merely untidy.

Where it landed

The report identified a data-model constraint that made the plan's multi-market expansion roughly three times more expensive than the target had represented. The fund proceeded, at a revised valuation, with a remediation plan attached to the investment. We were retained afterwards to advise the incoming CTO.

Most technical diligence we commission reads like a list of opinions. This one had numbers, a ranking and a price. Our investment committee used it directly.
Principal, European growth-equity fund
Next step

Tell us what is not working.

An hour on a call, no charge and no deck. We will tell you honestly whether this is work we are good at — and if it is not, who to talk to instead.

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First call
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Notice period
One month, either way
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