In order to solve transportation inequity, Planet42, an Estonian automobile subscription startup operating in South Africa, has raised $100 million in total in equity and debt financing. Together with participation from current and new investors, including Rivonia Road Capital, who also offered a $75 million credit facility, the $15 million equity round was co-led by Naspers and ARS Holdings.
An additional $10 million in loan financing came from private investors. With the money, Planet42 will be able to expand its business quickly and realize its goal of offering one million automobiles globally. Planet42 raised $6 million in equity and $24 million in debt financing in 2021. Since then, the business has almost quadrupled in size, and in the past year alone, the company has bought over 5,000 cars in South Africa.
Mega rounds (deals worth $100 million or more) are an indication that African late-stage firms have matured to a certain point and need money to advance. And sure, we are starting to notice an increase in these startups in Africa.
In Africa, 2021 continues to be the year with the most super rounds. OPay, Chipper Cash, JUMO, Tala, TymeBank, MFS Africa, MNT-Halan, Wave, Zepz, Zipline, Andela, Flutterwave, and TradeDepot all participated in 13 of these giant rounds throughout the year.
Massive rounds in 2023 are evidence that investors and venture capitalists are still interested in Africa’s expanding startup scene. With the additional funding, Planet42 will be able to quickly expand its operations and realize its goal of offering 1 million automobiles globally.
Eerik Oja and Marten Orgna founded Planet42, a mobility business, in Estonia in 2017 and it provides rent-to-buy car subscriptions. With a concept that enables those who are underserved by conventional banking institutions to acquire and operate a vehicle, it solves the inequity in transportation.
The platform determines a customer’s risk profile through the use of data science and proprietary scoring algorithms, and then provides an offer for them to purchase a car from a dealership of their choice. The Planet42 network now includes approximately 1,000 dealerships in South Africa. More than 250 automobiles have been delivered to consumers in Mexico.
Each customer’s budget is determined by these algorithms, and subscribers can choose any new or used automobile from Planet42’s network of more than 700 local car dealerships depending on that budget. Planet42 purchases the vehicle and leases it to the client on a regular basis. Customers can use the offering at any time to either purchase or return the vehicle to Planet42. 89% of the clients serviced so far would not have had any other way to get a personal automobile.
According to Grant Wing, managing director and country manager of Planet42 in South Africa, the startup aims to enable people create a better future for themselves, even as they strive for their financial inclusion.
“Planet42 is committed to breaking down the barriers that South Africans face in accessing cars. The struggle for credit, particularly for car finance, has been an ongoing challenge for millions of people in the country.
Essentially, no car equals lower standards of living and, in many cases, no income at all. Our mission is to empower people to create a brighter future for themselves, and we are proud to be a part of their journey towards financial inclusion and success,” said Wing.