Private equity (PE) investment in technology companies continues to grow, driven by digital transformation, scalable business models, and demand for specialist talent. For Australian technology businesses considering PE investment — and for leaders building teams in preparation for a transaction — understanding what private equity firms look for is critical.

While financial performance matters, many of the factors that influence valuation and deal success are closely tied to people: leadership depth, organisational capability, and the ability to execute growth plans at scale.

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Market Position and Growth Potential

PE firms start by evaluating the market a company operates in and its long-term growth potential. Companies aligned with high-growth themes such as cloud services, cybersecurity, enterprise software, data platforms, and AI-enabled solutions are typically viewed favourably.

Investors will assess:

• How defensible the company’s market position is (differentiation, switching costs, competitive intensity)

• The size and growth rate of the addressable market

• Whether the business can realistically scale beyond Australia into Asia–Pacific or global markets

Deal example: In August 2025, Infomedia agreed to be acquired via a scheme of arrangement for A$1.72 per share (less permitted dividends), with the announcement noting an implied equity value of A$651 million — illustrating PE appetite for software businesses with recurring revenue and global customer bases.

Increasingly, PE firms also explore adjacent market opportunities (e.g., vertical-specific software and emerging technologies) and look for potential bolt-on acquisitions to accelerate growth post-deal.

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Revenue Quality and Business Model Resilience

Predictable revenue and strong retention are key. Investors scrutinise customer concentration and churn risk, then look across sales, product, and customer success to confirm the business consistently delivers value.

Businesses are generally more attractive when they have:

• A recurring revenue model (subscription and/or contracted services)

• Clear, repeatable go-to-market motions and measurable conversion funnels

• Mature customer success and renewal processes

• Strong gross margins and a credible path to operating leverage as the company scales

Trend insight: Subscription-based SaaS models are particularly attractive because they can offer predictable cash flow and clear levers for upsell and cross-sell — if retention fundamentals are strong.

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Financial Performance and Leadership Readiness

Strong results alone aren’t enough. PE firms also evaluate whether the organisation has the people and processes to manage growth under PE ownership.

They typically look for:

• High-quality reporting and KPI discipline

• Robust forecasting and planning cadence

• Disciplined cost control and margin management

• Finance leadership with experience scaling businesses (and supporting transactions)

Investors will also assess M&A readiness — ensuring finance and operations teams can manage acquisitions, integrations, and cross-border expansion without distracting the core business.

Deal example: In August 2025, Accenture announced it had agreed to acquire CyberCX (terms not disclosed publicly). Media reporting at the time cited a valuation of more than A$1 billion, reinforcing how investors and strategic buyers can place significant value on operational capability, commercial execution, and delivery depth — not just the product.

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Technology and Product Teams

The product matters — but the teams behind it matter just as much. PE firms examine whether engineering and product teams can maintain, enhance, and scale platforms efficiently, while managing technical debt and sustaining innovation.

Areas that often draw investor attention include:

• Delivery velocity and engineering productivity

• Platform scalability, reliability, and uptime discipline

• Cybersecurity posture, data governance, and privacy-by-design practices

• Regulatory compliance capability (where applicable)

Insight: Investors are increasingly assessing cloud maturity, automation capability, and practical AI adoption as indicators of scalability and competitiveness.

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Leadership Depth and Talent Retention

Management capability is often one of the most influential factors in a PE acquisition. Investors look closely at leadership experience, cohesion, and whether the business relies heavily on founders or a small number of key individuals.

They’ll evaluate:

• The strength of the leadership bench (succession depth across key functions)

• Clarity of roles, decision rights, and accountabilities

• Retention strategies and incentive structures aligned to long-term value creation

In the Australian market, succession planning and bench strength have become standard due diligence considerations, reflecting the competitiveness of local talent markets — particularly across engineering, product, sales, and cyber.

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Operational Scalability and Growth Execution

Scaling under PE ownership requires structured operating models, clear decision-making frameworks, and performance-driven teams. Growth strategies commonly include geographic expansion, new product launches, and bolt-on acquisitions.

Execution typically depends on the ability to attract and retain specialist talent across:

• Engineering and product

• Sales, partnerships, and customer success

• Finance, operations, and integration leadership

Deal example: KKR’s majority investment in Education Perfect (with Five V Capital remaining a shareholder) is an example of how leadership capability and talent planning can support accelerated growth and expansion across multiple markets.

Operational scalability is closely linked to people readiness. Even with strong market tailwinds, companies with unclear roles, underdeveloped teams, or fragmented processes often underperform post-deal.

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ESG and Organisational Culture

Environmental, social, and governance (ESG) expectations continue to rise. Strong governance, ethical data practices, and an inclusive workplace reduce operational risk and signal a well-managed organisation. Engaged employees and aligned leadership also contribute to sustainable long-term performance.

Many PE firms increasingly view healthy culture and governance as enablers of execution — particularly during periods of rapid change such as integration, expansion, or restructuring.

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International Expansion and Market Timing

Investors also examine whether a company is ready for international growth, evaluating market entry strategy, regulatory requirements, and operational capability. Timing matters: backing a business as it enters a high-opportunity window in Asia–Pacific or global markets can materially influence returns.

Early investment in local leadership, international sales capability, and on-the-ground operational support can significantly improve the odds of successful expansion.

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Post-Deal Integration and Value Creation

PE firms plan for post-acquisition integration and value creation early. This may include operational improvements, process standardisation, systems upgrades, and integration of bolt-on acquisitions.

Businesses that can adopt new systems quickly, manage change well, and scale operations without disruption are often valued more highly — and tend to deliver stronger outcomes post-deal.

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Key Takeaway: People Drive PE Readiness

For technology companies, private equity readiness is as much about people as it is about performance. Leadership depth, succession planning, and talent retention can directly impact valuation — and determine whether growth plans are executed successfully after the deal.

If you’re thinking about private equity or preparing for a transaction, strengthening your operating structure and leadership bench early can unlock value and reduce risk.

Contact us to discuss how we support Australian technology businesses at key growth and investment stages.