South African car subscription startup Planet42 has raised US$30 million in debt and equity funding to drive its international expansion, with its first cars already on the road in Mexico as it aims to provide a total of one million cars worldwide by 2025.
Launched as CarGet in 2017, Planet42 partners with dealerships across South Africa to offer access to a personal car to its largely underbanked clientele.
The startup uses an automated scoring algorithm to process client applications based on credit bureau, affordability, and alternative data. If the application is approved, Planet42 analyses the customer’s validation documents before purchasing the car from the dealership and renting it to the customer. The asset is secured with tracking technology, as well as comprehensive and mechanical insurance.
Planet42 last raised capital in the form of a debt round last December, and it has now secured a US$30 million round that mixes equity and debt. The $6 million equity round was led by Naspers, with existing investors Change Ventures and Startup Wise Guys also participating alongside unicorn founders like Martin and Markus Villig (Bolt) and Ragnar Sass (Pipedrive). Existing debt investors, such as Lendable, added US$24 million.
Planet42 will use the additional funds to buy cars and continue its rapid growth in the South African market, as well as kickstart growth in Mexico. Since 2017, the startup has purchased nearly 7,000 cars for people unfairly ignored by banks, and it has set itself the ambitious global goal of providing one million cars to people facing transport inequality by 2025.
“Having access to a personal car may be a needless luxury in London but change your life in Johannesburg. A personal car means that you can get to work reliably, you can apply for that job that is farther away from your home, you can drop the kids to school, and go visit grandma,” said Eerik Oja, co-founder and CEO of Planet42.
“Planet42’s take on car subscription is unique because we focus on the underbanked customer and the second-hand car. This has allowed us to outperform peers who operate in markets like Europe and the US, where car subscription is a solution to a problem that doesn’t really exist – most people can get a bank to buy a car for them. This funding is further proof that we’re on the right path in fighting transport inequality and promoting financial inclusion.”
Fabian Whate, head of Naspers Foundry, said his firm was delighted to be the first South African investor supporting Planet42 with its next phase of growth.
“Planet42 is an innovative solution to addressing transport inequality in South Africa and beyond, and has the potential to unlock further economic participation. This fits in with our focus of backing purpose-driven technology businesses. Investing in Planet42 is consistent with the portfolio we’ve built to date and Naspers Foundry’s healthy pipeline of potential future investments,” he said.
