SA car subscription startup Planet42 raised $15.8 M funding from Standard Bank
In order to help it grow, South African startup Planet42, which addresses transportation inequality by enabling individuals who are unable to obtain traditional bank credit to own cars, has raised ZAR300 million (US $15.6 million) in debt and equity financing from Standard Bank.
Started in 2017 as CarGet, Planet42 collaborates with dealerships all over South Africa to provide its primarily underbanked clientele with access to a personal vehicle.
The startup processes client applications based on credit bureau, affordability, and alternative data using an automated scoring algorithm. Before buying the vehicle from the dealership and renting it to the customer, Planet42 evaluates the customer’s validation documents if the application is accepted. In addition to mechanical and comprehensive insurance, asset tracking technology is used to secure it.
Standard Bank’s ZAR300 million (US $15.8 million) investment to the rent-to-buy car subscription company consists of a ZAR250 million (US $13.2 million) credit facility and a ZAR50 million (US $2.6 million) equity injection. Planet42 has now raised more than US $150 million in capital through previous rounds, which included the US$100 million debt and equity funding announced in February 2023.
Building on the more than 20,000 vehicles that have been given to people in recent years, the partnership with Standard Bank will allow Planet42 to purchase more cars, empowering many more South Africans.
Additionally, the Menlyn Park Shopping Centre in Pretoria is home to the company’s first car marketplace. In addition to broadening Planet42’s customer base, this physical marketplace enhances its online presence by providing a more tactile environment for users to peruse and choose vehicles. Nearly 2,000 South Africans have benefited from the Menlyn marketplace’s personal subscription car delivery service since its launch.
“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.”
Standard Bank was able to put together a “unique debt structure for a high growth business,” according to Nimalan Reddy, senior vice president of the bank’s Corporate and Investment Banking. The bank also invested equity capital to become a partner with 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.
