Planet42, a South African car subscription startup, has raised $30 million in debt and equity funding to help it expand internationally. Its first cars are now on the road in Mexico, and the company hopes to deliver one million cars worldwide by 2025.
Planet42 last raised funds in a debt round in December, and it has now secured a US$30 million round that includes both stock and debt. Naspers led the $6 million equity round, which included existing investors Change Ventures and Startup Wise Guys, as well as unicorn founders Martin and Markus Villig (Bolt) and Ragnar Sass (Pipedrive). Existing debt investors such as Lendable contributed an additional $24 million.
The additional funds will be used to buy cars and continue Planet42’s quick expansion in the South African market, as well as to launch growth in Mexico. Since 2017, the firm has acquired roughly 7,000 cars for people who have been unfairly ignored by banks, and it has set an ambitious global goal of supplying one million cars to people experiencing transportation inequality by 2025.
Planet42, which launched as CarGet in 2017, works with dealerships around South Africa to provide its mostly unbanked customers with access to a personal vehicle.
Client applications are processed using an automated scoring algorithm based on credit bureau, affordability, and alternative data. If the application is granted, Planet42 examines the customer’s validation documents before acquiring and renting the vehicle from the dealership. Tracking technologies, as well as comprehensive and mechanical insurance, are used to protect the asset.
“Having access to a personal car may be a needless luxury in London but change your life in Johannesburg. A personal car means that you can get to work reliably, you can apply for that job that is farther away from your home, you can drop the kids to school, and go visit grandma,” said Eerik Oja, co-founder and CEO of Planet42.
“Planet42’s take on car subscription is unique because we focus on the underbanked customer and the second-hand car. This has allowed us to outperform peers who operate in markets like Europe and the US, where car subscription is a solution to a problem that doesn’t really exist – most people can get a bank to buy a car for them. This funding is further proof that we’re on the right path in fighting transport inequality and promoting financial inclusion.”
Fabian Whate, head of Naspers Foundry, said his firm was delighted to be the first South African investor supporting Planet42 with its next phase of growth.
“Planet42 is an innovative solution to addressing transport inequality in South Africa and beyond, and has the potential to unlock further economic participation. This fits in with our focus of backing purpose-driven technology businesses. Investing in Planet42 is consistent with the portfolio we’ve built to date and Naspers Foundry’s healthy pipeline of potential future investments,” he said.