London, United Kingdom, 25 July 2023 – Global investment firm Carlyle (NASDAQ: CG) announced today that it has agreed to acquire Evolution Funding (“Evolution”), the UK’s largest used auto finance platform, investing alongside Evolution’s founders and existing investor LDC. The terms of the transaction were not disclosed.
Based in Chesterfield, UK, Evolution is a technology-led motor finance platform that connects car dealers and auto finance providers with multiple lenders. Since it was founded in 2002, the business has grown to become the largest used car finance marketplace in the UK with its funding platform widely embedded across UK automotive dealerships. It has c. 500 employees and supports over 4,000 dealer forecourts, including national car dealerships such as Marshall, Sytner Group and Trust Ford, and major online-only used car dealers such as Cinch and Cazoo. It also has brand partnerships with the AA and fintech services like Experian and ClearScore, which offer access to direct-to-consumer channels. In the last twelve months, Evolution has enabled nearly 150,000 financing transactions with a total platform volume in excess of GBP 2 billion. Over the last four years, the business has almost quadrupled the total volume of advances it enables along with doubling its employee headcount.
Evolution has made two key strategic acquisitions in recent years: Click Dealer in July 2021 and Motion Finance in May 2023. Click Dealer is highly complementary to Evolution’s existing services and supports its growth strategy to enhance its technology, digital capabilities, and SaaS proposition. Motion Finance has allowed Evolution to further grow its core market share in independent motor dealers.
Equity for the investment will be provided by Carlyle Europe Technology Partners (“CETP”) V, a €3 billion fund which invests in technology companies across Europe. CETP will work with management to support Evolution’s growth in the used car finance market by working to expand the range of dealers’ product offerings on its interface and in doing so becoming an enablement platform for additional sales, developing a digital lead-generation capability, and exploring consolidation of the fragmented motor finance market through further M&A.
Fernando Chueca, Managing Director in the CETP investment advisory team, said: “In Evolution, we identified the opportunity to partner with an advanced technology platform in the UK’s fragmented market for used car finance, which we believe is an attractive and growing segment. In addition to its market leading position and high barriers to entry, we believe the continued development and expansion of Evolution’s digital platform, as well as exploring M&A opportunities, can unlock significant value. We look forward to working with Lee and the entire team at Evolution.”
Lee Streets, founder and CEO of Evolution Funding, said: “We believe Evolution holds a unique position in the UK’s motor finance market, built upon capturing the opportunity to provide a differentiated, technology-based platform which helps both lender and dealer partners navigate change from digitisation and regulation. In Carlyle, we have found the ideal partner to continue our growth journey, given their experience growing and scaling entrepreneurial technology businesses like ours.
We would like to thank the team at LDC for their support over the last four years, investment in the development of our technology platform, and for helping us to position Evolution at the leading edge of the market. We are excited for this next stage of Evolution’s journey as we continue to transform the motor finance market.”
Lawrence Dean, Partner and Head of South at LDC, added: “Lee and his team have almost quadrupled the total volume of advances Evolution’s platform enables in the last four years; a significant achievement given the uncertainty in the market. In addition, Evolution has continued to invest in its technology, playing a leading role in the digitisation of the motor finance market and developing innovative digital finance solutions that are shaping the industry and customer experience. We look forward to continuing to work together to support Evolution’s future growth plans.”
CETP was advised by Houlihan Lokey, DLA Piper, Alvarez & Marsal, LEK and Seedcloud.
Evolution Funding and LDC were advised by Arma Partners, Gowling WLG, KPMG, OC&C and Crosslake.
The transaction is subject to FCA approval.
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About Carlyle
Carlyle (NASDAQ: CG) is a global investment firm with deep industry expertise that deploys private capital across three business segments: Global Private Equity, Global Credit and Global Investment Solutions. With $381 billion of assets under management as of March 31, 2023, Carlyle’s purpose is to invest wisely and create value on behalf of its investors, portfolio companies and the communities in which we live and invest. Carlyle employs more than 2,200 people in 29 offices across five continents. Further information is available at www.carlyle.com. Follow Carlyle on Twitter @OneCarlyle.
About Evolution Funding
- Evolution Funding is the UK’s largest independent motor finance broker and technology provider, authorised and regulated by the Financial Conduct Authority. Its head office is in Chesterfield, Derbyshire, UK. They employ circa 500 staff UK-wide.
- Evolution Funding delivers brokered motor finance solutions for approximately 4,000 active motor dealers using a panel of 30+ lenders. Dealers consist of independent and franchised dealers through to car supermarkets and include many of the Top 10 national dealer groups.
- Evolution Funding develops its own market-leading technology to facilitate digital finance journeys for consumers via dealer websites, price comparison and eligibility platforms.
- Evolution Funding has been named Car Finance Awards ‘Best Broker’ for seven consecutive years.
- Evolution Funding’s Vision is “To lead change, digital innovation and excellence in motor finance”.
- For further information, visit http://web.evolutionfunding.com/news
About LDC
- LDC is a private equity investor and part of Lloyds Banking Group. It is authorised and regulated by the Financial Conduct Authority.
- We have partnered with more than 675 management teams since 1981 and have a portfolio of more than 90 businesses across the UK.
- We have made investments across all major sectors of the UK economy and are actively supporting businesses in industries including Business Services, Consumer, Healthcare, ICT, Industrials, Media and Technology.
- Our teams are based in every part of the UK and we’re committed to investing in at least 100 businesses nationally over the next five years.
Media contacts
Carlyle:
Nicholas Brown
+44 7471 037 002
Evolution Funding:
Sarah Simpkins
sarahsimpkins@evolutionfunding.com
+44 7971 407 631
LDC:
Sophie Millward, Citypress
sophie.millward@citypress.co.uk
0161 235 0350
