Planet42, a South Africa-based car subscription company, has raised $16 million debt and equity funding from Standard Bank, marking a strategic move to local-currency funding and expanding its vehicle financing solutions.
Founded in 2017 by Eerik Oja and Marten Orgna, Planet42 uses data and algorithms to assess credit risk and offer customers flexible car rental or purchase options.
According to the company’s CEO and co-founder Eerik Oja stated that it is super expensive for a business in South Africa to operate without a local currency-based debt.He said that the firm has had no rand-based debt so far and this is a first step to a bigger strategic partnership for the company with Standard Bank.
The company says that they receive upto 60,000 applications for their vehicles each month which resulted in a sales increase averaging 26% last year and that the demand for their services is on the rise, a trend that has contributed to a 37% increase in company revenue in 2023.
Planet42 also boasts of having over 12,000 vehicles for consumers across South Africa and Mexico. As a result, the company secured funding of $100 million in 2023, aiming to expand operations in these two nations.
This significant sum of funding was made up of, $15 million in equity from shareholders (including Naspers Limited), $10 million in debt, and a $75 million credit facility provided by Rivonia Road Capital. Finally, following this round of financing Naspers took the decision to close Foundry, its tech investment fund focused on South Africa. However, they continue to maintain their existing investment commitments in start-up businesses.
In 2021, Planet42 secured $30 million in a combination of equity and debt funding, which consisted of $6 million in equity and $24 million in debt financing. This followed the company’s successful procurement of $2.4 million from a seed funding round and a further $10 million in debt, both of which occurred in 2020.