Rollup of the Decade? Two Private Equity Firms, One Boring Business, and a 10-Figure Payday

Jun 2, 2025

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Private equity firms made over 80x their money on Mister Car Wash. How?

In this episode, Mikk is joined by Pavel Prokofjev from Rollup Europe to dissect one of the most extreme boom-and-bust rollup stories in recent memory. At its peak, Mister Car Wash was a private equity dream: 40% EBITDA margins, 3-year paybacks, and a shift from transactional to recurring revenue — a perfect storm of unit economics and subscription-like predictability.
PE firm Leonard Green used aggressive sale-leasebacks and dividend recaps to fully recover its equity by 2019 while retaining control — ultimately achieving a 20x+ MOIC and IRRs north of 35%.

So why did the IPO flop? Why did the market re-rate from 20x to 10x EBITDA? And is the car wash rollup model broken — or just entering a new phase?

This is a deep dive into one of private equity’s most fascinating plays — packed with numbers, strategy, and hard-won lessons.

Thank you to our newest sponsor:
Spacebar Studios: https://www.spacebarstudios.co/

We explore:
00:00:00 - Did private equity kill the U.S. car wash opportunity?
00:01:00 - Why celebrities started investing in car wash rollups
00:02:40 - Why car washes were a PE dream: fragmentation, subscriptions, and margins
00:04:30 - Mister Car Wash: 80x return for PE, disaster for IPO buyers
00:06:00 - What killed investor returns: debt, high prices, and macro changes
00:08:15 - How express tunnels made $25/month memberships viable
00:10:00 - Churn, location strategy, and why car washes behave like SaaS
00:12:30 - How Mister Car Wash struck gold — twice
00:13:50 - 5 expensive lessons for future rollup operators
00:16:00 - Is a car wash holdco still viable in 2025?
00:19:30 - Will the U.S. playbook work in Europe? The tunnel tech gap
00:23:00 - Greenfield vs. buy-and-build: which wins in the long term?
00:25:00 - Final thoughts and advice from Pavel

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Pavel from RollUp Europe: https://rollupeurope.beehiiv.com/

This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.