Planet42, an Estonian car subscription company that helps individuals ignored by banks to get access to a personal vehicle, has announced a $10 million (R152 million) raise from US-based Lendable Inc, an institutional debt investor. To date, Planet 42 has bought and delivered over 2,000 second-hand cars in South Africa, its primary market.
“Our ambition is to make mobility accessible to everyone who can afford it, including the people that banks deem ‘blacklisted’, which comprise more than 90% of our clientele,” says Eerik Oja, the CEO and co-founder of Planet42.
“We’ve already signed up over 300 car dealerships across South Africa, but there are still several thousand to go. And that’s just the first market we have tackled. This round will open more doors in South Africa and beyond for us.”
Planet42 uses a proprietary scoring algorithm to automatically assess the risk of individual customers. If the decision is favourable, the customer will choose a suitable car from any dealership that Planet42 has partnered with. The company then purchases the car from the dealership and rents it to the customer on a subscription basis.
The assets are secured with tracking technology, as well as comprehensive and mechanical insurance.
The $10 million debt financing follows a $2.4 million seed raise in early 2020, in a round led by Change Ventures.
The company said the debt facility reduces the relative cost base of Planet42, enabling the company to pass savings onto its customers and make the product accessible to even more people. Because Planet42 owns the vehicles and generates predictable revenues from its fleet, it is in a position to raise significant debt financing. This takes the total amount of capital raised to $20 million.
“Planet42 has proved its ability to grow even through the current pandemic. We fully share their mission of improving people’s lives through access to mobility, and are thrilled to provide backing to expand Planet42’s impact in South Africa,” states Hani Ibrahim, Chief Investment Officer at Lendable.
Planet42 aims to use the new backing to scale its South African operations with the goal of purchasing 100,000 cars by 2024. The company is also considering options to expand into other emerging markets and plans to raise a Series A round in 2021.