Planet42 is a South African startup that buys cars and let’s its users access them on a subscription basis. It mostly targets people who would otherwise not access car loans from banks due to a variety of factors including credit scores.
The startup has scoring algorithms that determine the risk factor of each customer. It then buys the car from their partner dealerships and gives it to the qualifying customer for a subscription. The cars come with tracking systems, comprehensive and mechanical insurance. Planet42 has already partnered with over 300 dealerships in South Africa and has over 2,000 cars bought and delivered to paying customers.
With the $10 million raised, the startup plans to buy 100,000 cars by 2024. The funds came from US-based Lendable Inc, an institutional debt investor. Since Planet42 owns all its cars and gets predictable revenues from them, it is in a good position to get significant debt financing. The debt financing reduces their relative cost base which makes their subscription more affordable, this will in turn make it accessible to more people.
“Our ambition is to make mobility accessible to everyone who can afford it, including the people that banks deem “blacklisted”, which comprise more than 90 per cent of our clientele. We’ve already signed up over 300 car dealerships across South Africa, but there are still several thousand to go. And that’s just the first market we have tackled. This round will open more doors in South Africa and beyond for us,” said Eerik Oja, the chief executive officer (CEO) and co-founder of Planet42.
The debt financing comes after a $2.4 million seed raise that was led by Change Ventures at the beginning of this year. Next year, the startup has plans for raising a Series A.