Certified payroll review has always been a sampling exercise. Nobody reads every timesheet on a $400 million federally funded job, so compliance officers pull a subset and hope the rest looks like it.
Dili raised $15 million on July 30 to argue that assumption is now obsolete.
What the Round Buys
Khosla Ventures led the Series A. Allianz, Rebel Fund, Brick & Mortar Ventures’ Darren Bechtel and Y Combinator’s Garry Tan all participated. The round sits on top of a $6.7 million seed, putting total funding at $21.7 million. Dili came out of Y Combinator’s Summer 2023 batch and was founded that year by Anand Chaturvedi, Brian Fernandez and Stephanie Song.
The company says its software is live on about 700 projects, ranging from manufacturing facilities to data centers. Roughly half of its customers run it as in-house software. The other half hand Dili the entire compliance process on a contractor model, which tells you something about how badly staffed that function is at most firms.
The Architecture Choice
The interesting engineering decision is where Dili puts the model. LLMs handle only the data layer, turning unstructured documents into structured records pulled from internal files, vendor submittals, ERP systems and payroll platforms. A deterministic rules engine then applies the static compliance logic on top.
That separation matters. Prevailing-wage determinations are published by the U.S. Department of Labor and they are not fuzzy. A model that hallucinates a wage classification produces a filing that’s wrong in a way an auditor will find. Keeping the rules deterministic means the AI never decides whether something complies, only what the document says.
“Non-compliance can result in millions of dollars of fines for those projects,” Chaturvedi told TechCrunch. “So it’s really powerful to be able to check all the information as it comes in, instead of just sampling data.”
Why the Timing Works
The addressable problem got much larger over the past three years. Davis-Bacon applies to federally funded work, and the Inflation Reduction Act layered its own prevailing-wage and apprenticeship rules onto clean-energy projects claiming the full tax credit. CHIPS money brought a third overlay. Any contractor chasing that funding now carries a documentation burden that scales with headcount, not contract value.
Look at a job like the $5.75 billion Chicago Red Line Extension, where CTA set DBE goals of 25% for design and 22% for construction plus a requirement that 15% of trade labor hours come from union apprentices. Those aren’t box-checking targets. They’re auditable percentages that have to be demonstrated across every subcontractor and every pay period for five years of construction.
Chaturvedi’s pitch is that a full day of that work compresses to minutes. His broader claim is more pointed: “Software and AI are going to start eating a lot of those professional services workflows, so I think more and more people will start to bring those in-house.”
The third-party compliance monitoring firms contractors currently pay for exactly this service should read that sentence twice.