360° Technology Due Diligence

Technology due diligence is a structured evaluation of a company’s technology assets, architecture, and engineering capabilities, typically performed during a financing, acquisition, or strategic partnership. It aims to validate whether the technology can support the business plan, scale with growth, and withstand scrutiny from a risk, operational, and IP perspective. The process covers areas such as software architecture, codebase health, scalability, cybersecurity, infrastructure, team structure, development processes, and use of third-party or open source components. For technology-driven businesses, this audit is essential as it helps investors understand the technical foundations of the company, identify potential risks early, and assess whether future investment in the tech stack is likely to be defensive or value-accretive.

A code scan performed during Technology Due Diligence (TDD) identifies a wide range of software vulnerabilities and risk factors across three core dimensions: security, quality, and intellectual property (IP). On the security side, it can uncover known CVEs (Common Vulnerabilities and Exposures) in third-party dependencies, unsafe coding patterns, hardcoded credentials, and misconfigured encryption. From a quality and maintainability standpoint, the scan detects code complexity, dead code, duplication, and architectural anti-patterns that may hinder scalability or increase technical debt. On the IP front, it flags any use of open source components with restrictive licenses (e.g., GPL, AGPL) or unclear provenance which is essential for identifying potential compliance issues or contamination risks. These insights help investors assess the long-term viability, maintainability, and legal safety of the software asset.

The duration of a technology due diligence depends on the scope and complexity of the company being reviewed including the number of products, size of the engineering team, tech stack maturity, and availability of documentation and access. For a single-product SaaS company with well-organised materials, the process can typically be completed in 2 to 3 weeks. For multi-product platforms, companies with legacy systems, or where the codebase is large and less documented, it may extend to 4 weeks or more. Vaultinum works efficiently by combining structured data collection, automated code and infrastructure scans, and focused expert interviews allowing us to deliver detailed findings on tight deal timelines, while maintaining the depth and precision required for informed decision-making.

Technology Due Diligence (TDD) should be conducted before a transaction enters exclusivity, ideally during the confirmatory or advanced stages of a deal, once there is clear intent but before final terms are agreed. For investors or acquirers, this timing ensures technical risks are identified and factored into valuation, deal structure, or integration planning. For strategic partnerships or minority investments, a TDD may be conducted earlier to validate the strength of the tech platform before deeper commercial alignment. Delaying TDD too long can compress timelines and reduce the ability to act on findings. Starting early allows for a more thoughtful assessment of scalability, security, IP exposure, and the level of investment likely needed post-deal.

In M&A transactions, Technology Due Diligence (TDD) is important for validating that the target’s technology can support the investment thesis. It helps identify technical debt, scalability limitations, cybersecurity risks, and IP issues that could impact integration, post-deal investment needs, or long-term value creation. For acquirers, TDD provides clarity on whether the product is defensible, maintainable, and aligned with business objectives or whether it will require significant refactoring. It also verifies ownership and compliance of key software components, particularly open source usage. In short, TDD protects against costly surprises post-close and enables more informed deal structuring, especially in tech-heavy or software-led acquisitions.

Technology Due Diligence lays the groundwork for successful post-acquisition integration by identifying technical, organisational, and process-level considerations before the deal closes. It surfaces potential challenges such as incompatible architectures, infrastructure inefficiencies, fragile deployment processes, or siloed knowledge, all of which can impact how quickly the acquired technology can be scaled, maintained, or integrated into the buyer’s existing ecosystem. TDD also helps define early priorities for tech team alignment, resource allocation, and roadmap rationalisation. By clarifying what will need to change and what is already working, it enables more realistic integration planning, reduces execution risk, and accelerates time-to-synergy. For buyers with a platform strategy, it ensures the acquisition complements rather than complicates the broader tech landscape.