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Tag: Planet42

  • How Planet42 Rent-to-Own car scheme helps South Africans

    How Planet42 Rent-to-Own car scheme helps South Africans

    Driving a car is important for people in society because it gives them social status and freedom, and independence.

    People over 65 have trouble walking or riding their bikes to get to bus stops. So, driving is often the only way for people to stay mobile on their own.

    South Africa has a big problem with the number of private vehicles and how often people use them, especially in cities. But not much has been done to get people to switch to public transportation.

    People think that public transportation is not safe and doesn’t live up to the standards set by private vehicles.

    But Planet42, a mobility start-up with a rent-to-own plan, has changed the way people think about owning a car.

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    Car ownership

    In many developing countries, buying an automobile is challenging, especially for low-income people. When seeking vehicle finance, those with bad credit histories often confront lender disinterest or high interest rates.

    Planet 42 has simplified car ownership, however. As one of the few African mobility startups, the company offers a car subscription service to solve this inequity. The company’s scoring systems go beyond credit ratings to assess consumer risk.

    This method permits those without bank accounts to qualify for auto loans. It has also decreased the requirement for considerable finances to buy an automobile. Planet42 allows car-less people to buy a car without saving money.

    Planet42 car dealerships

    Planet42 gets used cars from a network of car sellers and uses technology to reduce risk and make it easier for people to get money. Then, these cars are rented out to customers without physical checks or face-to-face meetings.

    In some parts of the world, having a car isn’t a luxury but rather a requirement. Having a car gives people new options and frees them from having to rely on public transport, which is slow and not always effective.

    Public transport services in well-established places like the US and Europe make personal mobility less important. Because of this, people don’t need their own cars as much. But in many other parts of the world, being able to move quickly, safely, and comfortably is still a big and difficult problem.

    Planet 42 wants to make it easier for everyone to get around. This means that more people in South Africa and other places will be able to enjoy the benefits of having a car. So, the goal of the start-up is to make it easier for more people in the country to buy their own car.

    Track record so far

    Planet 42 has made a lot of progress in the South African market. They have over 700 stores, which is a huge number. The new business has been able to give buyers access to a large number of cars. The company has listed more than 7,000 cars, so South African buyers have a lot to choose from.

    According to Cars.co.za, Planet42 dealerships have expanded from 700 to 1,000, indicating substantial growth in their network. Since partnering, the company says, the new sellers in South Africa have seen their average sales go up by 26%.

    Planet42 says that so far, 89% of their customers don’t have any other way to get a personal car. This number shows how much of an effect and value a start-up has on its customers. Planet 42 meets a very important market need.

    It also shows that there is a lot of interest in their services and that they could grow and be successful in the future. The company says that the start-up’s move into Mexico is a strategic move to address travel inequality around the world.

  • Planet42 secures $100m funding round for expansion

    Planet42 secures $100m funding round for expansion

    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.” 

    Read also: Mercedes-Benz, Google partner to improve Digital Technologies for cars

    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.

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    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.