A report from the United Nations reveals that only half the world’s urban population has adequate access to public transportation.
However, the majority of them who are excluded from access to reliable public transport are wage-earning workers in emerging markets.
Despite having bank accounts and stable incomes, they are unable to get financing from traditional financial institutions to buy their vehicles.
The Estonian-born, Johannesburg, South Africa-based car subscription startup Planet42 is fighting transport inequality by putting cars in the hands of people unfairly ignored by traditional banks.
“Safe and reliable transport is a key driver of social and economic inclusion in emerging economies. It enables people to access opportunities like jobs, education, and public services more easily when public transport is often unreliable, painfully slow, unsafe – and usually all those things at once. We are here to make transport more accessible and are constantly working on making Planet42’s car subscription offering accessible to people unfairly ignored by banks,” said Eerik Oja, co-founder, and CEO of Planet42.
Raised $100M
To up its game, Planet42 raised $100 million in combined equity and debt funding.
The $15 million equity round was co-led by Naspers (also backed Dott) and ARS Holdings, with participation from existing and new shareholders, including Rivonia Road Capital, who also provided a $75 million credit facility.
Additionally, undisclosed private investors contributed a further $10 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 announcement comes over a year after raising $6 million in equity and $24 million in debt financing.
Rent-to-buy car subscriptions
Founded by Marten Orgna and Eerik Oja in 2017, Planet42 is a mobility startup that offers rent-to-buy car subscriptions.
By combining a proprietary scoring engine with a robust car dealership partner network, the company has been able to buy cars for 15,000 people that struggle with access to traditional vehicle financing.
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.
The company claims that 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 recently launched in Mexico, with over 250 cars already delivered to customers. “Our experience in South Africa has shown that the subscription model can make an enormous impact on everyday people in emerging markets. We have also expanded into Mexico, a country with similar challenges to South Africa with a large population of underbanked working people struggling with transport inequality. Our goal is to buy cars for a total of 1 million families in the coming years,” Eerik added.
“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.
