South African startup Planet42, which offers a car subscription platform aimed at mitigating transport inequality by providing cars to individuals unable to secure traditional bank credit, has secured ZAR300 million (approximately US$15.6 million) through debt and equity funding from Standard Bank. This funding is designed to fuel the company’s ongoing expansion efforts.
Originally founded in 2017 under the name CarGet, Planet42 collaborates with car dealerships across South Africa to facilitate personal car access for its predominantly underbanked customer base. The startup employs an automated scoring algorithm to evaluate client applications, drawing on data from credit bureaus, affordability assessments, and alternative data sources. Upon approving an application, Planet42 examines the customer’s verification documents, purchases the vehicle from the dealership, and then rents it to the client. To secure the asset, the company utilizes tracking technology in addition to comprehensive and mechanical insurance coverage.
The financial package from Standard Bank consists of a ZAR250 million (US$13.2 million) credit facility complemented by a ZAR50 million (US$2.6 million) equity investment into the rent-to-buy car subscription service. With this latest round, coupled with previous funding announcements including a US$100 million debt and equity round in February 2023, Planet42 has now amassed over US$150 million in capital.
This partnership with Standard Bank will empower Planet42 to purchase additional vehicles, furthering its mission to provide mobility to a greater number of South Africans. This builds on the company’s success in provisioning over 20,000 vehicles to its customers in recent years.
Additionally, Planet42 has unveiled its inaugural car marketplace located at the Menlyn Park Shopping Centre in Pretoria. This physical marketplace not only broadens Planet42’s operational footprint but also enhances its online presence, offering customers a tangible environment to explore and select vehicles. Since its inception, nearly 2,000 South Africans have acquired a personal subscription car from the Menlyn marketplace.
Eerik Oja, CEO and co-founder of Planet42, emphasized the significance of the partnership with Africa’s largest banking group, viewing it as a testament to the shared belief in the transformative potential of the car subscription model for enhancing mobility and addressing structural inequalities. Oja highlighted the crucial role of personal vehicle access in promoting financial inclusion and economic empowerment, leading to improved living standards and opportunities for South Africans.
Nimalan Reddy, senior vice president of Standard Bank’s Corporate and Investment Banking, praised the innovative financing structure crafted for Planet42, noting the shift to local funding to better suit the company’s requirements. Reddy underscored Standard Bank’s commitment to supporting initiatives that contribute to sustainable growth and make a meaningful difference in the communities it serves, aligning with the bank’s objective to propel Africa’s development forward.
