South African Car Subscription Company, Planet42, Secures $16 Million in Funding

Planet42, a car subscription company based in South Africa, recently received $16 million (R300 million) in funding from Standard Bank. 

This funding, in local currency, will help the company pay off expensive loans in euros. Founded in 2017 by Eerik Oja and Marten Orgna, two Estonians, Planet42 uses algorithms and data to assess a person’s credit risk before offering them a car through a subscription model.

The company has been growing steadily, having raised about $150 million so far, including a previous $100 million last year.

They receive over 60,000 applications monthly and have seen a 26% increase in sales for their South African dealers last year. Additionally, their revenue spiked by 37% in 2023 due to increasing demand for their services.

Planet42 has also expanded its operations, purchasing more than 12,000 vehicles for customers in South Africa and Mexico. 

In 2023, they raised $100 million to scale up in these two countries, with investments from various sources including Naspers Limited and Rivonia Road Capital.

The CEO of Planet42 emphasised the importance of local currency-based debt for businesses in South Africa, highlighting that the company had not previously taken on rand-based debt. He expressed excitement about the partnership with Standard Bank, calling it a first step towards a larger strategic partnership.

In the competitive landscape, Planet42 faces rivals like Autochek and Moove, which offer similar services in parts of sub-Saharan Africa. 

However, Planet42 distinguishes itself by targeting private individuals. Moove, for instance, recently secured $10 million in debt funding from Stride Ventures.

Despite the competition, the car subscription market is growing rapidly, with projections estimating its value to reach $223.07 billion by 2027, up from $119.28 billion in 2021.