South African startup Planet42, a car subscription platform addressing transport inequality by putting cars in the hands of people who cannot access traditional bank credit, has raised ZAR300 million (US$15.6 million) in debt and equity funding from Standard Bank to help it continue to expand.
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.
The ZAR300 million (US$15.8 million) investment from Standard Bank combines a ZAR250 million (US$13.2 million) credit facility and ZAR50 million (US$2.6 million) equity injection into the rent-to-buy car subscription company. With previous rounds, including US$100 million debt and equity funding announced in February 2023, Planet42 has now raised more than US$150 million in capital.
The partnership with Standard Bank will enable Planet42 to buy more cars in order to empower many more South Africans, building on the more than 20,000 vehicles that have been provided to people in recent years.
The company has also launched its first car marketplace at the Menlyn Park Shopping Centre in Pretoria. This physical marketplace not only extends Planet42’s reach but also complements its online platform, offering a tangible experience for customers to explore and select vehicles. Since its launch, nearly 2,000 South Africans have taken delivery of a personal subscription car from the Menlyn marketplace.
“Having the largest banking group in Africa partnering with South Africa’s pioneering car subscription company demonstrates our joint belief in this new model of mobility. Lack of access to a personal vehicle not only hinders economic opportunities but can also lead to a lower standard of living and contribute to ongoing structural inequality,” said Eerik Oja, CEO and co-founder of Planet42.
“Having access to a personal vehicle fosters financial inclusion and economic empowerment, paving the way for a brighter and more accessible future for every South African. It’s incredibly significant to have a group as prestigious as Standard Bank align with this mission. Their commitment to innovation and inclusion makes them the ideal partner for us.”
Nimalan Reddy, senior vice president of Standard Bank’s Corporate and Investment Banking, said the bank had been able to put together a “unique debt structure for a high growth business”, while also investing equity capital to become a partner to Planet42.
“The company was previously funded from hard currency and we were able to provide local funding to better match its needs. Our engagement with Planet42 reflects our dedication to fostering sustainable growth and making a real difference in the communities we serve. We are thrilled to support Planet42’s mission of enhancing mobility and reducing transport inequality, furthering our vision of driving Africa’s progress,” Reddy said.
