Our 2025 CxO Technology Pathways Report reveals a striking statistic: 45% of tech C-suite appointments across Europe were made into PE-backed businesses.

For a sector that represents a relatively small proportion of the overall European business landscape, this concentration of technology leadership hiring is remarkable – and telling.  

John Smith, Partner within the Digital & Technology Practice at Eton Bridge Partners, explores how private equity’s approach to technology leadership is evolving, and what this means for value creation. Drawing on his experience advising funds and portfolio companies on senior technology and product appointments, John reflects on the data and the real-world dynamics shaping this trend. 

The end of the growth-at-all-costs era 

The question isn’t whether private equity has embraced technology leadership; it’s why this shift has accelerated so dramatically in recent years. 

The simple answer lies in changed market dynamics. The era of cheap money and “growth at any cost” has ended, with economic headwinds slowing transactions and multiples contracting. PE firms can no longer rely on favourable macroeconomic conditions or multiple expansions to drive returns. Instead, they must create genuine operational value – and technology and product have emerged as the most effective levers for doing so. 

As McKinsey highlights in its 2024 report “Bridging Private Equity’s Value Creation Gap,” traditional financial engineering is no longer sufficient. With higher costs of capital and compressed valuations, sustainable returns now depend on operational excellence, digital enablement, and leadership alignment that accelerate performance across the hold period. 

Where funds once focused predominantly on top-line growth, today’s environment demands a more sophisticated approach to value creation. Digital transformation has moved from a “nice-to-have” to a fundamental requirement for competitive returns. 

This represents a fundamental change in how PE approaches portfolio company improvement. The traditional playbook of cost reduction and process optimisation, while still relevant, is insufficient in a market where every basis point of performance improvement matters. Technology leadership has become the bridge between operational efficiency and scalable growth. 

Bringing leadership into focus 

Recent research underscores the importance of strong leadership in driving value creation within PE portfolios. As Harvard Business Review noted, leading funds are embedding leadership assessment and development into the deal cycle – recognising that talent and execution capability are as critical to returns as capital deployment. 

This insight reinforces why PE-backed businesses are increasingly prioritising technology leaders who can align operational strategies with fund objectives and deliver measurable results quickly. 

Why Chief Technology Officers (CTOs) dominate in PE 

Our report shows that CTO appointments significantly outnumber CIO roles in PE-backed businesses. This doesn’t feel coincidental but reflects the evolution of what PE firms need from their technology leaders.  

The CTO title signals product and platform focus rather than infrastructure and enterprise technology management. In a PE context, this translates directly to investable opportunities: new revenue streams, enhanced customer experience, operational automation, and ultimately, more compelling exit narratives. 

A CTO building a scalable product platform or implementing AI-driven process automation creates tangible assets that future buyers can value. A CIO managing enterprise systems, while essential, doesn’t typically generate the same multiple uplift at exit. 

This shift mirrors what we’re seeing across our mandates. PE-backed businesses aren’t just looking for technology and product leaders who can keep the lights on; they need visionaries who can architect the future state of the business and execute against tight timelines. 

The experience paradox: A closer look at the data 

Our report suggests that 52% of PE-backed tech CxO appointments were first-time in role. At face value, this appears counterintuitive. In our experience, most funds explicitly seek leaders with proven track records to mitigate execution risk, particularly given the compressed timelines and high stakes involved. 

However, this statistic may be misleading for several reasons. First, the rapid evolution of technology roles means that many experienced leaders are technically “first-time” CTOs despite having deep technology leadership experience under different titles – Head of Engineering, VP of Product, or Technology Director roles that encompass similar responsibilities, often at larger organisations. 

Second, the market has seen significant title inflation, with many established technology leaders moving from non-C-suite roles directly to CTO positions. Their experience is substantial, even if the CxO title is new. 

Most tellingly, our direct experience suggests that when PE firms do hire genuinely ‘step-up’ technology leaders, it’s typically where they bring specific industry expertise and knowledge, often from more established players within that space – and not into critical turnaround situations. 

The pragmatic reality is that PE’s time horizons and return expectations often mean most funds cannot afford the luxury of developing first-time executives. They need leaders who can deliver from day one. 

The Operating Partner evolution 

Technology platform building has become one of the key value creation tactics for PE sponsors, which has driven increased investment in specialised operating partner capabilities. We have worked on several technology-focused operating partner appointments across both mid-market and smaller funds in the last 18 months. 

Creating systematic approaches to technology-driven value goes beyond simply adding expertise. The best technology operating partners work alongside portfolio CTOs to ensure strategies align with fund objectives and exit timelines, providing both mentorship and accountability. 

For smaller funds, particularly, we have placed independent or fractional operating partners providing access to senior technology expertise that would otherwise be cost-prohibitive. This democratises access to sophisticated value creation strategies across the PE spectrum. 

The commercial imperative 

Perhaps the most significant shift we’ve observed is the increasing commercial acumen expected from PE-backed technology leaders. The days of the purely technical CTO are ending. Today’s PE-backed technology leaders must understand unit economics, customer acquisition costs, and market dynamics as fluently as they understand system architectures. 

This evolution reflects the market reality that sponsors must find new ways to unlock value in a high-cost-of-capital environment. Technology decisions should be pragmatic and drive measurable business outcomes within defined investment timeframes rather than existing in isolation. 

The most successful PE-backed CTOs we work with are those who seamlessly blend technical excellence with commercial insight. They don’t just build better systems; they build systems that demonstrably improve business performance and create defensible competitive advantages. 

Looking ahead 

The concentration of technology hiring in PE-backed businesses isn’t a temporary phenomenon. As our report shows, 25% of all CxO hiring was within the Software and Computer Services sector, and 45% of Tech C-suite appointments were within PE-backed companies; we expect this trend to strengthen further. 

The fundamental drivers haven’t changed; PE firms need differentiated value creation strategies, and technology is one of the most scalable routes to achieving them. What has changed is the sophistication of approach, both in terms of the leaders being hired and the operational infrastructure built around them. 

For aspiring technology leaders, PE-backed businesses offer compelling career opportunities, albeit with heightened performance expectations. For funds, the quality of technology leadership has become a key differentiator in value creation effectiveness. 

The market expects not just recognition of technology’s importance but excellence in its execution. Those who deliver can expect to see their impact reflected not just in business performance, but in exit multiples. 

If you’d like to discuss how technology leadership could accelerate value creation in your portfolio or at a fund level, or explore opportunities in PE-backed technology roles, please get in touch.