South African fintech startup, Planet42 has received $2.4 million in funding from Change Ventures to help it scale its growth.
Other investors who participated in the round include Martin Villig, CEO of Bolt, Ragnar Sass (Pipedrive), Marko Virkebau (MeetFrank), Kristjan Vilosius (Katana MRP) and other Estonian tech entrepreneurs.
Planet42 collaborates with dealerships in South Africa to offer access to a personal car to its large underbanked clients.
Co-founder and Chief Executive Officer of Planet42, Eerik Oja said, “Having a personal vehicle is a necessity in South Africa, as public transport is underdeveloped while ride-hailing is prohibitively expensive for most. A family car can be a lifesaver, but banks focus on newer, expensive vehicles and only approve 15 percent of car financing applicants. This leaves few alternatives to lower- and middle-income households.”
“We see a huge need for people to improve their standards of living with better mobility, but a lack of options in the market to service them. More than 24 million people are credit impaired or have no access to finance in South Africa – that’s well over half of the adult population.”
The startup leverages an automated scoring algorithm to process client applications based on the credit bureau, affordability, and alternative data. When 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 and mechanical insurance.
Partner at Change Ventures, Rait Ojasaar said “There are multiple markets in Latin America, Africa and South-East Asia with similar pain points – poor public transport, limited access to credit, and long commutes. Fintech has the potential to make a huge positive impact on how people get from A to B in these places, and we are proud to back Planet42 in making it a reality.”
Till date, the startup has delivered about 2,000 vehicles to clients this way. Planet42 targets a total of 100,000 cars by 2024 in South Africa alone.
Planet42 was launched as CarGet in 2017 by Co-founders, Eerik Oja, and Marten Orgna in South Africa.
Image Credits/Planet42 Founders Eerik Oja and Marten Orgna (Photo: Jake Farra)