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Planet42, a South African car subscription startup, has raised $100 million in combined equity and debt funding to address transport inequality by putting cars in the hands of people who cannot access traditional bank credit. 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.
Planet42’s socially inclusive subscription 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.
Reliable, accessible and affordable public transportation reduces pollution and traffic and promotes productivity and inclusion. Only half the world’s urban population has convenient access to public transportation, according to 2019 data from 610 cities in 95 countries.
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. Planet42 plans to scale its business and meet its ambition of providing 1 million cars worldwide.
Transport inequality is a significant issue globally, with only half of the world’s urban population having adequate access to public transportation, according to the United Nations. 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.
Grant Wing, South Africa Managing Director and Country Manager of Planet42, said, “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.”
Andrew Rolfe, General Partner at ARS Holdings, who joins Planet42 as a member of its supervisory board, said, “Planet42’s team has displayed remarkable execution, with a proven innovative, cash-generating, and globally scalable model.”
Rivonia Road Capital’s Co-Founder and Managing Partner, Daniel Zinn, said, “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.”