Planet42, a South Africa-based car subscription company that buys used cars from dealerships and rents to customers via a subscription model, has raised $30 million in equity and debt.
The bridge round is a part of a larger Series A round next year. It has equity and debt financing.
In June 2020 the company raised $2.4 million in a seed round and in December it had $10 million in debt from a venture debt fund. The fund doubled its participation in the debt round, which raised $20 million.
Naspers led the equity round with $3.4 million. The lead investor in Planet42's seed round is Change Venture, as well as other existing investors.
Oja and Marten Orgna founded the company in 2017: they have Estonian roots. The car subscription model was created to cater to private individuals ignored by South African banks when they need vehicle financing, according to Oja.
The car subscription is socially inclusive. Oja said that the company is buying second-hand cars and that the unit cost is lower compared to a subscription model that purchases new cars.
It can be difficult to get a personal car in emerging markets if one's income isn't stable. People with bad credit are less likely to be accepted for vehicle financing if they don't have a good credit history.
Planet42 is one of the few companies that is focused on the African market. The company claims to use proprietary scoring to assess risk in underbanked customer segments.
The company has over 700 dealers. Customers can find out what budget suits them and choose new or pre-owned cars from Planet42's dealerships network.
Planet42 buys the car and rents it out to the customer. According to Planet42, 89% of the customers have no other means of gaining access to a personal vehicle.
Customers who couldn't get bank financing can now get a brand new car thanks to our scoring. The chief executive said that they have figured out a way to put entry-level brand new cars in the hands of the same target market and customers who are unfairly ignored by banks.
In four years, Planet42 has raised $50 million in equity and debt and has listed more than 7,000 cars. When Oja spoke with TechCrunch in March, he noted that the company grew 25% month on month in 2021.
Martial Orgna and Eerik Oja founded Planet42.
In parts of Africa, there are other companies that offer similar services. Moove focuses on financing cars, while Planet42 and Autochek are for private individuals. Planet42 has a network of stakeholders in the automobile industry.
Moove and Autochek made inroads into other African countries after launching from Nigeria. The next attractive market for Planet42 is off the continent.
Oja was asked if Planet42 would expand into other parts of Africa. Market size is the main reason. South Africa has 25% of the passenger cars on the African continent, so whatever market we go next in Africa will be smaller than South Africa. 1.1 million second-hand cars are sold and bought in South Africa every year. In Mexico, that number is 7 million. The Mexican market is six times larger than South Africa. We want to go to the big markets.
The company bought its first cars for clients in Mexico. In the country, more than half of the population deal with only cash.
Oja said that Planet42 plans to expand to Mexico in the future, and that the company has set up an office and employed two staff.
He said that the company hopes to buy 1 million cars for its customers by the year 2025. Planet42 said it has made progress in becoming a carbon-neutral company through a wind farm project in Northern Cape, South Africa. The farm was financed by the car subscription company.
South Africa-based car subscription company Planet42 is going carbon neutral.
