Planet42, a South African-based car subscription company that buys used cars from dealerships and leases them to customers through a subscription model, has raised $100 million in equity and debt from a wide range of investors. .
Naspers, through its early-stage investment vehicle, Naspers Foundry, co-led the $15 million equity round (the SA-based investor also led Planet42’s previous $30 million round in late 2021 ) alongside ARS Holdings. The equity round welcomed participation from new and existing shareholders, including Rivonia Rodoviária Capital; the Los Angeles-based global alternative asset manager provided a $75 million line of credit. Planet42 also received $10 million in debt financing from private investors.
According to the company, the new financing, comprised of equity, credit line and debt, will rapidly grow its business and provide one million cars globally to people excluded from traditional car finance.
So far, the Estonian-founded mobility startup that offers rental car subscriptions to buy bought over 12,000 cars for its customers in South Africa and Mexico. When co-founder and CEO Eerik Oja spoke to TechCrunch in a December 2021 interview, Planet42 claimed to have distributed over 7,000 cars to customers in South Africa; according to a statement released by the company, bought more than 5,000 vehicles in the African country in the last 12 months. Additionally, the six-year-old mobility startup started an expansion in Mexico last year and has already delivered 250 cars to customers there.
Planet42 says its expansion into Mexico is part of its strategy to address transport inequality on a global scale. Only half of the world’s urban population has adequate access to public transport, according to the UN, and many of those excluded from access to reliable public transport are salaried workers in emerging markets who, despite having bank accounts and stable incomes, are unable to obtain financing from traditional financial institutions to purchase their own vehicles.
In South Africa, 70% of vehicle finance applications are rejected by banks, according to Cars.co.za, Planet42 dealerships, which increased from 700 in 2021 to 1,000 dealerships, report bounce rates of up to 90%. Planet42 is one of the few startups, including Moove, Autochek and FlexClub, focused on the African market that addresses this inequality through different mobility offerings.
For Planet42, it uses proprietary scoring algorithms to assess risk in low-income customer segments. And with its algorithms, customers can figure out which budget suits them and choose new or used cars from Planet42’s network of dealerships. After that, Planet42 buys the car and rents it to the customer on a subscription basis. Planet42 claims that of all customers served so far, 89% would have no other means of accessing a personal vehicle. Dealers in Planet42’s South African network have reported an average increase in sales of 26% since becoming partners, the company said in a statement.
“Safe and reliable transport is a key factor for social and economic inclusion in emerging economies. It allows people to access opportunities like jobs, education and public services more easily when public transport is often unreliable, painfully slow, unsafe – and often all of those things at the same time,” said Oja, who founded Planet42 with the CFO Marten Orgna, in a statement. . “We are here to make transportation more accessible and are constantly working to make Planet42’s car subscription offering accessible to people unfairly ignored by banks.”
The company has raised over $150 million in equity and debt from investors including Naspers, Change Ventures, Startup Wise Guys, Martin Villig (Bolt), Ragnar Sass (Pipedrive) and Andrew Rolfe. This became carbon neutral in 2021. According to Daniel Zinn, founder and managing partner of Rivonia Road Capital Rolfe, one of Planet42’s newest investors, “Rivonia Road is excited to partner with Planet42, providing the capital needed to address this market inefficiency and help democratize access to mobility for thousands of underserved consumers around the world.