Planet42, a South African startup revolutionizing the car subscription landscape, has recently secured a substantial investment of ZAR300 million (approximately US$15.6 million) from Standard Bank. This significant financial boost comprises both debt and equity funding, aimed at propelling the company’s growth and expanding its transformative services.
Originally launched as CarGet in 2017, Planet42 has been on a mission to democratize vehicle access in South Africa, particularly for those underserved by traditional banking institutions. The company’s innovative business model operates through a partnership with local dealerships, providing a pathway to car ownership for a predominantly underbanked customer base.
At the heart of Planet42’s operation is an automated scoring algorithm that meticulously evaluates client applications using a mix of credit bureau data, affordability assessments, and alternative data points. Successful applicants are then able to have a car purchased on their behalf by Planet42, which they can rent. This system is bolstered by state-of-the-art tracking technology and comprehensive insurance, ensuring both security and peace of mind for the customer.
The latest funding round from Standard Bank is a strategic amalgamation of a ZAR250 million (US$13.2 million) credit facility and a ZAR50 million (US$2.6 million) equity investment. This follows on the heels of a US$100 million debt and equity funding round announced in February 2023, bringing Planet42’s total capital raised to an impressive figure exceeding US$150 million.
This partnership is set to enable Planet42 to significantly increase its car inventory, thereby empowering an even larger segment of the South African population. This initiative builds upon the company’s already notable achievement of providing over 20,000 vehicles in recent years.
In a move to enhance its customer experience, Planet42 has also inaugurated its first physical car marketplace located at the Menlyn Park Shopping Centre in Pretoria. This marketplace serves as a tangible extension of Planet42’s online platform, allowing customers to physically explore and select vehicles. Since its inception, the Menlyn marketplace has successfully facilitated the delivery of nearly 2,000 subscription cars to South Africans.
Eerik Oja, CEO and co-founder of Planet42, and Nimalan Reddy, senior vice president of Standard Bank’s Corporate and Investment Banking, both underscored the significance of this collaboration. They highlighted the shared commitment to fostering financial inclusion, economic empowerment, and a brighter future for South Africans by addressing the critical issue of transport inequality.
With this new influx of capital and the support of Africa’s largest banking group, Planet42 is poised to drive forward its mission of enhancing mobility and accessibility, contributing to the ongoing progress and development of the African continent.
In 2022, Planet42 successfully raised USD 3.4 million in equity funding from leading South African investor, Naspers. Naspers invested USD 3.4 million through its Naspers Foundry business. This funding round is a precursor to a Series A capital raise in 2022.