Planet42, the car subscription startup addressing transport inequality by putting cars in the hands of people who cannot access traditional bank credit, has raised $100 million in combined equity and debt funding.
The $15 million equity round was co-led by Naspers and ARS Holdings, with participation from existing and new shareholders, including Rivonia Road Capital, who also provided a $75 million credit facility. Private investors contributed a further $10 million in debt financing. The funds will enable Planet42 to rapidly scale its business and meet its ambition of providing 1 million cars worldwide.
In 2021 Planet42 raised $6 million in equity and $24 million in debt financing. Since then, the company has nearly quadrupled the size of its business and purchased well over 5,000 cars in South Africa in the last 12 months alone.
According to the United Nations, only half the world’s urban population has adequate access to public transportation. Many of those excluded from access to reliable public transport are wage-earning workers in emerging markets who, despite having bank accounts and stable incomes, are unable to get financing from traditional financial institutions to buy vehicles of their own. This impacts their ability to access economic opportunities while increasing personal safety risks and perpetuating structural inequality.
Planet42 is addressing transport inequality with a socially inclusive subscription model. This model provides people who are underserved by traditional banking institutions with a path to vehicle ownership.
Using proprietary scoring algorithms and data science, Planet42 assesses a customer’s risk level and generates an offer to acquire a car from a car dealership of their choice.
In South Africa, nearly 1,000 dealerships have been added to the Planet42 network. Planet42 buys the customer’s chosen car and rents it out to them on a subscription basis. Of the customers served to date, 89% would not have been able to access a personal vehicle through other means. Dealers in Planet42’s South African network have reported an average increase in sales of 26% since becoming partners.
Following the success of the business model in South Africa, Planet42 recently launched in Mexico, with over 250 cars already delivered to customers. Given the similarities with problematic access to mobility in South Africa and Mexico, it is the perfect next step for Planet42 as it seeks to address transport inequality on a global scale.
“Safe and reliable transport is a key driver of social and economic inclusion in emerging economies. It enables people to access opportunities like jobs, education and public services more easily when public transport is often unreliable, painfully slow, unsafe – and usually all those things at once. We are here to make transport more accessible and are constantly working on making Planet42’s car subscription offering accessible to people unfairly ignored by banks,” said Eerik Oja, co-founder and CEO of Planet42.
“Our experience in South Africa has shown that the subscription model can make an enormous impact on everyday people in emerging markets. We have also expanded into Mexico, a country with similar challenges to South Africa, with a large population of underbanked working people struggling with transport inequality. Our goal is to buy cars for a total of 1 million families in the coming years,” he added.
“I’m thrilled to support Planet42 as they expand worldwide and improve the lives of thousands of individuals who face limited access to private transportation, which can significantly impact their quality of life and opportunities. Planet42’s team has displayed remarkable execution, with a proven innovative, cash-generating, and globally scalable model,” said Andrew Rolfe, General Partner at ARS Holdings, who joins Planet42 as a member of its supervisory board.
“Rivonia Road is excited to partner with Planet42 by providing the capital needed to address this market inefficiency and help democratize access to mobility for thousands of underserved consumers worldwide,” said Rivonia Road Capital’s Co-Founder and Managing Partner, Daniel Zinn.
“Planet42 is a unique and transformational company, offering a life-changing solution to the people that it serves. Planet42’s exceptional founding and management team have achieved substantial traction since inception in very large but historically underserved markets. We look forward to being a part of Planet42’s ongoing success,” he continued.
