Carlyle to acquire used car finance platform Evolution Funding

Global investment firm Carlyle has agreed to acquire Evolution Funding, the UK used car finance platform, for an undisclosed sum.

The acqusition includes investment alongside Evolution’s founders and existing investor LDC.

The transaction is subject to FCA approval.

Based in Chesterfield, 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 a team of over 500 people and supports over 4,000 dealer forecourts, including 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 12 months, Evolution has enabled nearly 150,000 financing transactions with a total platform volume in excess of £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.

Equity for the investment will be provided by Carlyle Europe Technology Partners V, a €3bn fund which invests in technology companies across Europe.

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 chief executive of Evolution Funding, said: “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.”