Global investment firm Carlyle (NASDAQ: CG) has made a significant move in the automotive finance sector by acquiring Evolution Funding, the UK’s largest used auto finance platform. The acquisition marks a strategic step for Carlyle as it expands its portfolio of technology-led companies and strengthens its position in the dynamic auto finance market. The deal was made in partnership with Evolution’s founders and existing investor LDC, and the specific financial terms have not been disclosed.
Evolution Funding, headquartered in Chesterfield, UK, is a technology-driven motor finance platform that connects car dealers and auto finance providers with multiple lenders. Since its establishment in 2002, the company has experienced remarkable growth, becoming the dominant player in the UK used car finance market. Its funding platform is widely embedded across automotive dealerships in the UK, supporting over 4,000 dealer forecourts. Some of its notable partnerships include national car dealerships such as Marshall, Sytner Group, and Trust Ford, as well as major online-only used car dealers like Cinch and Cazoo. Moreover, the company has brand collaborations with the AA and fintech services like Experian and ClearScore, providing access to direct-to-consumer channels. In the past year, Evolution has facilitated nearly 150,000 financing transactions, with a total platform volume surpassing GBP 2 billion.
The acquisition comes at a time when Evolution has been strengthening its position through strategic acquisitions, including Click Dealer in July 2021 and Motion Finance in May 2023. These acquisitions have allowed Evolution to expand its technological capabilities and enhance its services, supporting its growth strategy.
Equity for the investment has been provided by Carlyle Europe Technology Partners V (CETP V), a €3 billion fund that focuses on investing in technology companies across Europe. CETP V’s partnership with Evolution aims to drive growth in the used car finance market by expanding dealers’ product offerings through its interface, developing digital lead-generation capabilities, and exploring consolidation opportunities in the fragmented motor finance sector through further mergers and acquisitions.
Fernando Chueca, Managing Director in the CETP investment advisory team, expressed optimism about the acquisition, stating that it presents a unique opportunity to partner with an advanced technology platform in the UK’s motor finance market. He believes the continued development and expansion of Evolution’s digital platform, along with exploring M&A opportunities, will unlock significant value and drive innovation in the industry.
Lee Streets, Founder and CEO of Evolution Funding, shared his enthusiasm for the partnership with Carlyle, emphasizing their shared vision to transform the motor finance market through advanced technology solutions. Streets believes that Carlyle’s experience in scaling technology businesses makes them the ideal partner for Evolution’s growth journey.
The acquisition by Carlyle represents a significant milestone in Evolution’s journey, positioning it as a leader in the smart workplace industry. The deal is subject to approval from the Financial Conduct Authority (FCA), after which Evolution and Carlyle will work closely to leverage their respective strengths and drive innovation in the rapidly evolving automotive finance market.
