- South African car subscription startup Planet42 raised $100 million in equity, credit facility, and debt funding to scale its business.
- It received $15 million in equity from Naspers Foundry and ARS Holdings, $75 million in credit from Rivonia Road Capital, and $10 million from other private investors.
- Planet42 follows a subscription model that rents used cars to unbanked customers in South Africa and Mexico, allowing them to buy out the car or continue renting indefinitely.
Planet42, a South African car subscription startup, raised $100 million in equity, credit facility, and debt. It means that the company sold portions of its business in a build to scale.
According to a report by Techpoint Africa, the startup received a $15 million in equity from early-stage investment firm Naspers Foundry and ARS Holdings. It got $75 million in credit from Rivonia Road Capital and other private investors provided the remaining $10 million.
Planet42 previously raised $30 million funding in equity and debt in 2021 to power its expansion into Mexico and delivering 250 cars. It delivered 7,000 cars to its local customers the same year and have purchased more than 12,000 vehicles so far.
–What Are The Most Profitable Tech Startups Fields In Africa?
–Kenyan HR Payroll Startup Workpay Raises $2.7 Million Funding
–WhatsApp Is Bringing A Newsletter Feature.
Its business model involves buying used cars from dealerships and renting them out using a subscription model. To reduce the risk of loaning cars to its unbanked customers, the company says it uses a scoring algorithm.
Dealerships who are part of Planet42 claim to have increased their sales by 26% and the startup says that 89% of its subscribers would not have access to cars without it. On its website, it says that customers can buy out their cars at anytime for a buy-out price that decreases per month.
“After renting the car for 5 years (60 months) you automatically have the option to buy it for R5,000 (NGN126,000). Alternatively, you can continue renting indefinitely. You can also return the car to Planet42 at any time after the first 6 months,” the startup says.
Planet42 was founded in 2017 by Eerik Oja and Marten Orgna and it has taken advantage of the 70% unbanked population that are rejected by traditional vehicle financing banks in South Africa.
For your daily dose of tech, lifestyle, and trending content, make sure to follow Plat4om on Twitter @Plat4omLive, on Instagram @Plat4om, on LinkedIn at Plat4om, and on Facebook at Plat4om. You can also email us at email@example.com and join our channel on Telegram at Plat4om. Finally, don’t forget to subscribe to OUR YOUTUBE CHANNEL.