Planet42, a car subscription service based in South Africa, has raised $16 million, the equivalent of R300 million, in debt and equity funding from Standard Bank. The funding, which is in local currency, will be used to repay the company’s expensive loans previously made in Euros. This follows on from the company’s raising of $100 million in combined equity, credit facility, and debt just one year prior. In total, the company has raised roughly $150 million to date.
Established in 2017 by two Estonian founders, Eerik Oja and Marten Orgna, Planet42 utilizes algorithms and data points to gauge the credit risk of a potential customer before presenting them with an offer to either rent or purchase a vehicle. They execute this through the use of a subscription-based model.
The company has claimed that they receive in excess of 60,000 applications for their vehicles each month. According to Planet42, this resulted in their South African dealers experiencing a sales increase averaging 26% last year. Moreover, they have noted that the demand for their services is on the rise, a trend that has contributed to a 37% increase in company revenue in 2023.
In addition, Planet42 asserts that they have acquired 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.
The company’s CEO stated in an interview just how costly it can be for businesses based in South Africa to operate without any debt based in the local currency. It was also revealed that Planet42 had, up to this point, not secured any rand-based debt.
Further to this, he expressed the importance of their partnership with Standard Bank, stating that it was the “first step to a bigger strategic partnership.”
Competitors of Planet42 within the sector include companies such as Autochek and Moove, both of which center their businesses around ride-hailing vehicles, providing similar services across parts of sub-Saharan Africa. Like Planet42, Autochek also targets private individuals. In a recent funding round, Moove raised $10 million in debt funding from Stride Ventures, a venture debt fund that is impartial to any particular sector. This occurred in February of 2024.
These competitors are operating within a substantial market, that was valued at an impressive $119.28 billion in 2021. Furthermore, this market is projected to reach an estimated value of $223.07 billion by 2027.
