Carlyle invests in motor finance platform

CETP are investing alongside Evolution’s founders and existing investor Lloyds Development Capital (LDC), who will retain a majority stake.

20-year-old Evolution Funding is now the UK’s largest used car finance marketplace. Since 2019, the business has almost quadrupled its volume of advances and doubled its workforce. This year, it has grown a total platform volume of more than £2 billion.

Fernando Chueca, managing director of the CETP investment advisory team, said they identified the opportunity to partner with an advanced technology platform in the UK’s fragmented market for used car finance, which is an attractive and growing segment.

He said, “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 mergers and acquisitions opportunities, can unlock significant value.”

Founder and CEO of Evolution Funding, Lee Streets, noted his company holds a unique position in the UK’s motor finance market built upon providing a differentiated, technology-based platform, which helps both lender and dealer partners navigate change from digitisation and regulation. He said, “In [CETP], we have found the ideal partner to continue our growth journey, given their experience growing and scaling entrepreneurial technology businesses like ours.”

Commenting, Lawrence Dean, Partner and Head of South at LDC praised Streets his team their significant achievement in an uncertain market. He added, “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.”

Evolution has made two key strategic acquisitions in recent years: Click Dealer in July 2021 and Motion Finance in May 2023.

The new investment will be provided by Carlyle Europe Technology Partners V, a €3 billion fund which invests in technology companies across Europe. CETP will work with Evolution to grow their presence in the used car finance market, develop a digital lead-generation capability and explore consolidation of the motor finance market through further mergers and acquisitions.