On the 25th of October 2024, the Court of Appeal handed down its judgment in the cases of Johnson v FirstRand Bank Limited, Wrench v FirstRand Bank Limited and Hopcraft v Close Brothers.
In response to the Judgment, Evolution Funding carried out a full review of how to ensure compliance with the new ruling for its dealers, lenders and customers.
This led to changes in Evolution’s processes and systems to create an enhanced commission disclosure consent journey. The updated journey addresses the heightened need for full transparency regarding informed consent, commission disclosures and additional duties.
Evolution has produced a guide that provides a summary of the key takeaways, how they are responding to support dealers’ businesses, and key actions dealers may need to consider.
N.B. This guide does not provide legal advice. If you are in any doubt about your obligations, you should seek legal advice, and this guide is provided purely for information and guidance.
View ‘Commission Disclosure Practices Update’ Nov 2024
Evolution Funding has appointed Mat Hanson as Group Chief Financial Officer (CFO), a newly created position that will play a pivotal role in driving the company’s long-term value creation plan. Hanson’s appointment is part of Evolution Funding’s strategic efforts to enhance its capacity at the Group level and support its growth objectives.
Hanson will oversee key aspects of Evolution’s transformation and strategy, including mergers and acquisitions (M&A) and potential international expansion. He will also oversee key stakeholder and shareholder relationships, including those with investors Carlyle and LDC, as well as banking and debt funding partners.
With over 17 years of experience in financial leadership, Hanson brings CFO expertise in technology-driven and private equity-backed businesses. His prior achievements include leading six strategic international acquisitions and a significant private equity sale at Cawood Scientific, as well as driving financial growth and refinancing at Travel Counsellors.
Hanson said:
“I am delighted to join Evolution Funding. The company’s culture, strong values, and impressive track record were key factors in my decision. With Carlyle’s backing and a solid foundation in place, I am confident in the company’s future prospects and look forward to contributing to its continued success.”
Lee Streets, chief executive officer, said:
“Mat brings a wealth of experience in leading financial strategies that drive both growth and operational efficiency. His expertise in managing complex acquisitions and his experience with private equity make him an ideal fit for our next phase of growth. We are pleased to welcome him to the team and are confident he will make an immediate and positive impact.”
As part of Evolution’s ongoing commitment to provide support and resources to our dealer partners, we are working to raise awareness of the SAF Approved deadline.
What is the SAF Approved deadline?
A new provision has been added to the Finance & Leasing Association’s (FLA) Lending Code, meaning FLA members can only arrange finance through SAF Approved (or equivalent) dealers and brokers. The majority of the UK’s vehicle finance providers are FLA members.
Independent used vehicle dealers must become SAF Approved (or equivalent) by 1 January 2025 to continue offering finance to customers using lenders who are FLA members, either directly or through Evolution Funding.
Franchised dealers or brokers should have been SAF Approved or equivalent since January 2023.
SAF is free. This is about improving standards across the industry. SAF Approval can also instil confidence and trust in the dealer’s business, so we encourage them to promote SAF approval on their website and in the dealership.
To become SAF Approved, all customer-facing staff who discuss finance with customers must pass the SAF Expert test. Once their customer-facing staff have passed the SAF Expert test, they can apply for SAF Approved certification. Their staff must retake the test every year to maintain your SAF Approved status.
More information on the process to become SAF Approved can be found here.
SAF equivalence
If the dealer is using an alternative vehicle finance training provider that is recognised as a SAF Equivalence Provider, the provider will monitor progress and apply to the FLA for SAF Equivalence status on their behalf. Further information on the criteria and process can be found here.
A recent poll by used auto finance platform Evolution Funding has revealed that dealers are unclear on the FCA’s expectations of consumer duty reporting.
As the 31 July deadline approaches for dealers to complete their Consumer Duty Annual Board Report, Evolution polled its dealers on their understanding of the requirements.
889 dealers responded, with a significant number either unaware of the requirement to produce a board report or not knowing they must produce their first report by the end of July.
When asked if they were comfortable with what the report should include, such as content, format, and management information, 76% of respondents said they weren’t.
Sam Osborn, Evolution’s head of risk and compliance, said:
“One year into consumer duty, it’s evident that dealers, especially smaller independent ones, need better support and guidance to meet the duty’s requirements, alongside improved benchmarking for general consumer duty standards.
“Principles-based regulation necessitates interpretation, demanding significant resources. This is challenging for smaller dealerships where time and specialist roles are scarce.
“Dealers are committed to serving their customers well, but knowledge gaps exist. It’s crucial that brokers and lenders offer direction and resources, leveraging their expertise and specialised teams.
“In addition to the technology and compliance processes we have in place, Evolution is dedicated to providing resources and guidance to help dealers meet their regulatory obligations. Our Consumer Duty Resource Hub offers extensive support, and we will continue to update it with new information.”
Used auto finance platform Evolution Funding has appointed Duncan Josey to the newly created role of chief strategy officer.
Josey brings over 21 years of experience across key business roles at Autotrader, including commercial director, digital marketing director, and key accounts sales director.
As part of the executive leadership team, Josey will lead the development and execution of strategic plans to achieve Evolution Funding Group’s goals of digitising, automating, and enhancing the consumer auto finance experience. A key focus will be advancing and leveraging the group’s ecosystem and digital platform.
Lee Streets, chief executive officer at Evolution Funding, said:
“From Autotrader’s early days as an analogue business to the digital giant we know today, Duncan has been at the centre of Autotrader’s radical transformation. As such, with his wealth of experience, he is well placed to accelerate Evolution’s similar journey to develop our ecosystem proposition and commercialise our data offering. We are delighted to welcome Duncan to Evolution as we drive forward to becoming the auto finance platform of choice.”
Josey said:
“This is an exciting move for me, and I look forward to working with the Evolution team. The automotive industry finds it hard to take advantage of modern advances in technology due to a fragmented and complex ecosystem. Evolution’s innovative approach to using technology to overcome that fragmentation and connect consumers and partners via their platform puts them in a unique position to transform the industry. I am delighted to be joining Evolution on that journey of transformation.”
Evolution Funding’s soft search pre-eligibility checking and ‘quote and propose’ technology has been integrated into the enhanced regulatory platform of Automotive Compliance, a principal firm authorised and regulated by the FCA and an automotive software provider.
The next-generation system represents a significant advancement in automotive finance compliance, offering dealerships a consolidated platform to streamline customer experiences while supporting consumer duty obligations. By embedding Evolution Funding’s features into Automotive Compliance’s existing system and compliance module, dealerships can avoid rekeying tasks, minimise administrative overheads, and ensure compliant customer interactions at all stages of the process.
The key focus of the enhanced platform is to offer more efficient processes, reduce time-wasting activities, and optimise finance penetration by streamlining the buying journey. The system displays tailored quotes based on the customer’s credit profile before routing them to the most appropriate lender for their credit circumstances, ensuring good consumer outcomes every time. Additionally, the system aims to enhance collaboration with first-string lenders by optimising the quality of submitted applications by integrating lender criteria.
Phil Harding, National Sales Director of Automotive Compliance, said:
“We are excited to be working with Evolution Funding to bring this enhanced regulatory platform to market. The integration represents a significant step in enhancing efficiency and compliance within the automotive finance sector. Our goal is to provide dealerships with the tools they need to streamline processes while maintaining regulatory standards and delivering good customer outcomes.”
David Bamforth, Evolution Funding Head of Sales (New Business), added:
“We’re delighted to stand alongside one of the leading principal firms in our shared dedication to regulatory compliance. At Evolution, it’s ingrained in our ethos, making this integration a natural fit. By aligning our offerings, we’re advancing industry standards and ensuring seamless experiences for our dealers and their customers.”
Evolution Funding wins ‘Best Broker,’ ‘Best Service for Dealers,’ and ‘Best Technology Partner’ at the Car Finance Awards 2024.
This marks the ninth consecutive year that Evolution Funding has won ‘Best Broker’. This award came from an entry that focused on 2023’s global investment from Carlyle, launching Evolution Funding into a new era with a redefined Purpose, Vision, and Mission, equipping us with the tools to connect the auto finance ecosystem with our award-winning technology.
Evolution Funding has been awarded ‘Best Service for Dealers’ for a second consecutive year. This entry focused on our Signature team and their achievement of £68.1m totalled advances in 2023, demonstrating our unique proposition in the high-value vehicle market.
Winning ‘Best Technology Partner’ emphasises our strong partnership with our sister company, Click Dealer. Together, we bring ClickFinance to life and transform an intricate car finance process into a streamlined, customer-focused journey.
The awards were held on the 15th of May in The Monastery, Manchester. Surrounded by astounding architecture, The Car Finance Awards was a night to unite with like-minded businesses in an ever-changing industry, highlighting and representing the achievement of best practices and reaching new heights.
We want to thank Credit Strategy for hosting such an incredibly successful night.
Evolution Funding has exchanged contracts to acquire motor finance broker Creditas Financial Solutions, subject to FCA approval. This strategic move marks another milestone in Evolution Funding’s growth trajectory and underscores its commitment to expanding dealer access to the group’s finance platform, technology, and broad lender panel.
Photo shows l to r: Lee Streets (Evolution CEO), Katie Hayes (Evolution COO), Andy Shaw (Creditas MD), Teresa Jagger (Creditas Risk & Compliance Director), and Phil Kerr (Creditas Finance Director).
Founded in 2007 by Andy Shaw and headquartered in Leeds, Creditas employs 60 staff and oversees four Appointed Representatives. Taking an innovative go-to-market approach, Creditas has leveraged commercial advantage and market share by uniquely championing an appointed representative regulatory business model in motor finance.
Creditas will continue to operate under its own brand as a subsidiary of Evolution Funding Group and with its existing management team at the helm.
Evolution has completed several acquisitions as part of its expansion plan, including automotive Software-as-a-Service provider Click Dealer in 2021 and the motor finance broker Motion Finance in 2023. Evolution secured majority investment from global private equity firm Carlyle in July 2023, leading to significant reinvestment in the company’s platform, technology, and digital capabilities.
Lee Streets, CEO of Evolution Funding, said:
“The acquisition of Creditas is highly complementary. With little overlap between Creditas and Evolution Funding Group’s dealer partners, it will grow Evolution’s footprint with independent retailers. At the same time, our technology, processes, and partnerships will enhance Creditas’ proposition for dealers, maximising its potential and driving long-term growth across the group.
“We have been impressed with Creditas’ approach to motor finance, the focus they put on building relationships and doing the right thing for consumers, an ethos at the heart of our own operations. We look forward to working closely with Andy and the team to identify further opportunities and harness our mutual strengths.”
Andy Shaw, Managing Director of Creditas, said:
“I am delighted we have joined part of the Evolution Group. Having built Creditas up over the last 17 years now is the time to become part of a much larger entity. We are looking forward to working with Lee and his team moving forward – it’s going to open a lot of new options for the benefit of our dealers.”
Creditas were advised by Peter Williams, David Kendrick, and Fraser Pirie of UHY Hacker Young (Manchester) LLP.
Following the recent investment in Evolution Funding by global investment firm Carlyle, the business has launched a new Purpose, Vision, and Mission. Designed to re-align the auto finance platform with its strategic growth plans, the new direction was revealed by Chief Executive Lee Streets at the company’s yearly Sales Conference.
The Carlyle investment, which is provided by Carlyle Europe Technology Partners (“CETP”) V, a €3 billion fund which invests in technology companies across Europe, cements Evolution’s position as a prominent technology business in the motor finance market.
The new Purpose, Vision and Mission will serve as guiding principles for the strategic direction of the company, including investment in its platform and finance capabilities, partnering opportunities across the ecosystem and marketplace, and new customer and revenue model targets.
Lee Streets, Evolution Funding CEO
Lee Streets, Evolution CEO, commented:
“Over the past 20 years, we have been on an incredible journey, and this year has been our biggest yet. In 2020 we launched our previous Vision and Mission, ensuring that everyone pulled in the same direction and leading to some important achievements and milestones over that time.
“Our new Purpose, Vision, and Mission will ensure our people and the market understand our aspirations and focus for the business in the coming years as we work in partnership with Carlyle to create a transformational proposition to the auto finance market.
“For existing and future partners, our direction demonstrates our continued commitment to investment and innovation in our platform. Coupled with our ambitious automation goals, we are fully focused on becoming the leading embedded finance provider and therefore the platform of choice for our partners. This is an exciting time for the market, and we look forward to being at the centre of it!”
Purpose
To transform the auto finance experience.
Vision
To be the technology platform of choice, connecting the auto finance ecosystem.
Mission
To digitise, automate and enhance the consumer auto finance experience, connecting dealers, OEMs, marketplaces, and lenders.
London, United Kingdom, Tuesday 25th 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 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, Alvarez & Marsal, LEK and Seedcloud.
Evolution Funding and LDC were advised by Arma Partners, Gowling WLG, KPMG, OC&C and Crosslake.
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