Naspers-backed car subscription company Planet42 has raised $100 million or R1.8 billion in combined equity and debt funding.
The $15 million or R275 millionequity 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 or R1.3 billion credit facility.
Private investors contributed a further $10 million or R183 million in debt financing.
The funds will enable Planet42 to rapidly scale its business and meet its ambition of providing 1 million cars worldwide.
The car subscription startup addressing transport inequality by putting cars in the hands of people who cannot access traditional bank credit.
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.
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.
“Planet42 is committed to breaking down the barriers that South Africans face in accessing cars. The struggle for credit, particularly for car finance, has been an ongoing challenge for millions of people in the country, even a decade ago, when the economy was arguably in better shape, and we understand the significant impact that this has on people’s lives. Essentially, no car equals lower standards of living and, in many cases, no income at all. Our mission is to empower people to create a brighter future for themselves, and we are proud to be a part of their journey towards financial inclusion and success,” said Grant Wing, South Africa Managing Director and Country Manager of Planet42.
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.
“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.
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.
“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 around the world,” 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.
