Planet42, a South African car subscription company, has secured $100 million in equity and debt finance to expand its operations and provide cars increasingly accessible to those who cannot qualify for standard auto loans. With these funds, Planet42 will be able to swiftly expand its operations and fulfil its goal of supplying one million automobiles throughout the globe.
The funding round was led by Naspers Foundry, an early-stage investment vehicle of Naspers, alongside ARS Holdings, which co-led the $15 million equity round, and Rivonia Road Capital, which provided a $75 million credit facility. Private investors also contributed $10 million in debt funding.
According to Grant Wing, Planet42’s South Africa managing director and country manager, “Planet42 is dedicated to eliminating the constraints that South Africans encounter in obtaining cars. Even a decade ago, when the economy was probably in better form, the fight for credit, notably for auto loans, was a constant difficulty for millions of people in the nation, and we realize the huge effect that this has on people’s lives. In essence, not having a vehicle means inferior living standards and, in many situations, no income. “Our mission is to enable individuals to build a better future for themselves, and we are delighted to be a part of their path to financial inclusion and success.”
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In his remark, Andrew Rolfe, general partner of ARS Holdings and a new member of Planet42’s supervisory board, said, “I’m thrilled to support Planet42 as they grow internationally and enhance the lives of thousands of persons who have restricted access to private transportation, which may greatly affect their quality of life and possibilities. “Planet42’s team has shown amazing execution, with a proven inventive, cash-generating, and internationally scalable platform.”
Previous funding raised by Planet42
The company had previously secured $2.4 million in a seed round in June 2020, followed by a $10 million fund obtained in loans from developing markets-focused venture debt fund Lendable in December 2020. Subsequently, Planet42 raised funds in the form of a US$30 million debt and equity funding round in February 2021, and it has already secured an additional US$100 million in debt and equity investment.
Since its last funding round in 2021, the firm has almost doubled its size and acquired over 5,000 cars in South Africa in the past year alone. The Planet42 network now includes over 1,000 dealerships. After the success of the South African business model, the venture recently expanded its operation into Mexico, with over 250 cars already delivered to consumers.
Services offered by the startup
Planet42 provides rent-to-buy car subscriptions and uses proprietary scoring algorithms to analyze risk in underbanked client categories, assisting consumers in finding acceptable vehicles and financing alternatives. According to the corporation, 89% of consumers serviced so far would not have had access to a personal car via any other method.
The startup is one of the few African-focused startups addressing inequality through a car subscription service. The car subscription concept began as an attempt to cater to private individuals who were disregarded by South African banks when they required vehicle financing. In most developing nations, acquiring a personal car may be difficult, particularly if one’s income is unstable. Lenders prefer to disregard customers with poor credit or charge them exorbitant interest rates for car finance if they do not have a good credit history.
So far, the Estonia-based mobility company has purchased over 12,000 vehicles for clients in South Africa and Mexico. Eerik Oja, co-founder and CEO of Planet42, said that the firm had supplied over 7,000 automobiles to clients in South Africa. Customers may use Planet42’s algorithms to determine their budget and pick new or used cars from the company’s network of over 700 dealerships.
