Planet42 - Afrikan Heroes

South African Vehicle Rental Startup Planet42 Raises $100M For Its Car Renting Business

February 23, 2023

Planet42, an Estonian-founded and South African-based car rental firm, has launched a $100 million financing to expand its operations throughout South Africa and Mexico.

According to CEO Eerik Oja, the investment consists of $15 million in stock from new and current owners such as Naspers Limited, Andrew Rolfe, and Change Ventures, $10 million in debt from shareholders, and a $75 million credit facility from Rivonia Road Capital.

The funds will be used to expand the company’s activities in South Africa and to speed its entry into the Mexican market.

“In South Africa, we want to put the pedal to the metal using this new financing to quickly add about 10,000 more cars to the fleet,” said Oja. “In Mexico we are exploring where best to find customers, and how to switch on dealerships, so it takes time to get the ball rolling, but we have started to test the market and have about 250 cars that side.”

He added that they chose the Mexican market because of the parallels they discovered between the country’s operational climate and that of South Africa.

“It’s very similar to South Africa in terms of income and car penetration and development or lack thereof, of financial services,” Oja added. “Plus public transportation there is slow, unreliable and dangerous, opening up a big market opportunity.”

A Look At What The Startup Does

Planet42 scores a customer’s risk level and generates an offer to buy a car from a dealership of choice in minutes using proprietary algorithms and data points. The firm claims to have around a thousand vehicle dealerships in its network, which accounts for approximately 40% of its sales.

Planet42 also says that their product promotes mobility inclusion in South Africa by filling the gap created by the country’s main banks, which are risk adverse in granting loans to clients to enable them to buy their own automobiles, as well as solving the issue of unreliable public transportation.

Planet42’s managing director, Grant Wing, indicated that the company’s goal was to grab around 1% of the used automobile market each year, which equated to approximately 200,000 cars in total fleet size. The $100 million will be useful in doing this.

The global car rental market was worth $119.28 billion in 2021 and is expected to reach $223.07 billion by 2027, with a cumulative annual growth rate (CAGR) of more than 11% during the forecast period, according to Mordor Intelligence’s Car Rental Market — Growth, Trends, COVID-19 Impact, and Forecasts (2022–2027) report (2022–2027).

Despite the fact that the study classifies Africa, along with South America and the Middle East, as a “low-growth” region in the sector, with $100 million in the bank, it appears that Planet42 and its investors are counting on the industry’s positive growth in Africa over the next several years.

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Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert.
As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard

South African Car Subscription Platform Planet42 Lands New $30M To Expand To Mexico

December 22, 2021

Planet42, a car subscription company located in South Africa that buys secondhand cars from dealerships and rents them to consumers on a monthly basis, has raised $30 million in stock and debt. The investment, dubbed a bridge round by co-founder and CEO Eerik Oja, is a precursor to a larger Series A deal later next year. It has a $6 million equity component and a $24 million debt component.

In June 2020, the firm raised $2.4 million in a seed round, followed by $10 million in loans from Lendable, an emerging markets-focused venture debt fund, in December. The fund increased its stake in the recently raised debt round to $20 million, with other investors filling in the gaps.

Naspers Foundry, the company’s early-stage investment entity, led the equity round with $3.4 million. Change Ventures, the main investor in Planet42’s seed round, as well as Startup Wise Guys, Martin and Markus Villig of Bolt, and Ragnar Sass of Pipedrive, are among the existing investors.

A Look At What The Startup Does

Despite its South African location, Planet42 has Estonian roots. Estonians Oja and CFO Marten Orgna started the company in 2017. In an interview, Eerik Oja stated that the automotive subscription model was intended to cater to private persons who are overlooked by South African banks when seeking vehicle financing.

The company claims to use proprietary scoring algorithms superior to traditional credit scores in assessing risk in underbanked customer segments.
The company has over 700 dealerships. And with its algorithms, customers can find out what budget suits them and choose new or pre-owned cars from Planet42’s dealerships network.

After that, Planet42 buys the car and rents it out to the customer on a subscription basis. Planet42 claims that of all the customers served so far, 89% would have had no other means of gaining access to a personal vehicle.

“We’ve gotten so good with our scoring that we can now enable the customers who couldn’t get bank financing to get a brand new car. We have figured out a way how to do it sustainably that we can put entry-level brand new cars in the hands of the same target market and customers who are unfairly ignored by banks,” the chief executive said.

Planet42 has offered over 7,000 cars to clients in South Africa, after raising a total of $50 million in equity and debt.

Planet42 founders (Marten Orgna and Eerik Oja)

The startup is relying on expansion outside of Africa as one of its competitive advantages.

“We’re just not doing it right now, but we’re not ruling it out for the future,” Oja answered on whether Planet42 would expand into other parts of Africa. “However, the main reason is market size. South Africa has like 25% of all the passenger cars on the African continent; that means that whatever market we go next in Africa will necessarily be smaller than South Africa. In South Africa, 1.1 million second-hand cars get sold and bought every year. In Mexico, that number is 7 million. So the Mexican market is six times larger than South Africa. So we want to go for the really big markets.”

The company announced that it had purchased its first vehicles for clients in Mexico. Similar issues arising from transportation inequity abound in the country, where 63% of the population relies only on cash.
However, Mexico is one of the few nations where Planet42 aims to expand in the near future, according to Oja, who also stated that the firm has opened an office and hired two people.

By 2025, he said, the company hopes to have purchased over 1 million cars for its customers in both current and future markets. Planet42 has also made progress toward becoming a carbon-neutral company, thanks to a wind farm project in South Africa’s Northern Cape. The car subscription company financed the farm for months with money from carbon offset credits.

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Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer

Planet42 Raises $10m in Debt Round for Expansion

December 7, 2020

Planet42, South Africa’s car subscription company that helps the unbanked to get access to personal vehicles has raised a US$10 million debt funding round to help it scale its operations and expand beyond South Africa to other markets across Africa. Planet42 was launched as CarGet in 2017, Planet42 partners with dealerships across South Africa to offer access to a personal car to its largely underbanked clientele. It uses an automated scoring algorithm to process client applications based on credit bureau, affordability, and alternative data. If the application is approved, Planet42 analyses the customer’s validation documents before purchasing the car from the dealership and renting it to the customer. The asset is secured with tracking technology, as well as comprehensive and mechanical insurance.

To date, Planet 42 has bought and delivered over 2,000 second-hand cars in South Africa, and it now plans to purchase 100,000 cars by 2024 after raising US$10 million from the US-based Lendable Inc, an institutional debt investor. The company is also considering options to expand into other emerging markets, and plans to raise a Series A round in 2021.

Speaking on the startups plans for expansion, the co-founder and CEO of Planet42, Eerik Oja, said that “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 per cent of our clientele. 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.”

The US$10 million debt financing follows a US$2.4 million seed raise earlier this year, in a round led by Change Ventures, and takes the total amount of capital raised to US$20 million. 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.

“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,” said Hani Ibrahim, chief investment officer at Lendable.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Six Months After Its Last Funding, South Africa’s Planet42 Secures $10m In Debt Round To Go International

December 6, 2020

Apparently, Estonian investors may have well understood the African mobility market. The game now may be not to go after the public transport sector or to launch another ride-hailing startup. Arising from the $109 million investment secured by their fellow national company, Bolt (formerly Taxify) to invade the African market, South Africa-based Estonian startup Planet42, which in June this year, raised over $2.4 million to conquer the South African mobility market, has again secured US$10 million debt funding round to move into new markets.

Eerik Oja, the chief executive officer (CEO) and co-founder of Planet42 — *Eerik Oja, chief executive officer (CEO) and co-founder of Planet42*

“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 per cent of our clientele. 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,” said Eerik Oja, the chief executive officer (CEO) and co-founder of Planet42.

Here Is What You Need To Know

The US$10 million debt financing came from the US-based Lendable Inc, an institutional debt investor.
This means that the total amount now raised by the startup is now US$20 million. The startup also has plans to raise a Series A round in 2021.
With the financing, the company plans to expand into other emerging markets.
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.

Why The Investor Invested

“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,” said Hani Ibrahim, chief investment officer at Lendable.

The co-founders have previously long been working in investment firms, hence the relative ease and deep connection in the industry. One of the co-founders, Marten Orgna also has a long history of the South African mobility space, hence the investors’ trust in the capacity of the team to execute.

Planet42 debt funding Planet42 debt funding

A Look At What Planet42 Does

Planet42 originally launched as CarGet in 2017 to service South Africa, a market well-known to co-founder and CFO Marten Orgna, who ran African Investments for Trigon Capital. The startup partners with dealerships across South Africa to offer access to cars for personal use to its largely underbanked clientele (9 out of 10 of customers).

Planet42 uses an automated scoring algorithm to process client applications based on credit bureau, affordability, and alternative data.

If the application is approved, Planet42 analyses the customer’s validation documents, such as IDs, payslips and bank statements before purchasing the car from the dealership and renting it to the customer.

The asset is secured with tracking technology, as well as comprehensive and mechanical insurance. So far Planet42 has bought and delivered over 2,000 second-hand cars in South Africa, and it now plans to purchase 100,000 cars by 2024.

“We grew eight-fold in 2019 and we had our strongest month to date in April, despite the ongoing crisis. We see a huge need for people to improve their standards of living with better mobility, but a lack of options in the market to service them. More than 24 million people are credit impaired or have no access to finance in South Africa — that’s well over half of the adult population,” explains co-founder and CEO Oja, who gained experience in the alternative vehicle financing space as Country Manager for Mogo Finance in Estonia.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer

Africa’s Cross Border Fintech App Raise $13.8m Series A funding…

June 18, 2020

Mohamed Youssef ElBaz Founder and CEO of_Zedny

As Egypt’s Zedny raised $1.2 million while South Africa’s Planet42, raised $2.4-million respectively

Things seem to be looking up for some African startups even in the midst of the global pandemic. This buttresses an earlier point made by African Heroes early this month that inspite of the Covid-19 pandemic, investor’s seem to have a huge appetite for African markets and startups. Chipper Cash, Africa’s fastest growing fintech app which observers say has disrupted the traditional payment services by offering zero-fee, peer-to-peer payment services across seven African countries has just raised $13.8 million Series A funding from investors. This funding according to the company sources will help actualize its plans to expand its workforce across different geographies.

The round which was co-led by Deciens Capital and Raptor Group had other participating investors including 500 Startups and Liquid 2 Ventures. Chipper Cash, a cross-border app with services in Nigeria, Kenya, South Africa and Ghana and over 1.5 million users and records transaction volume of over $100 million a month has been the cynosure of investor’s eyes. And with this latest funding round, Chipper Cash has now raised $22 million in two years. Founded in 2018, Chipper Cash was started by Ham Serunjogi and Maijid Moujaled.

In a similar development, Egypt’s edtech startup, Zedny has raised $1.2 million pre-seed funding to roll out a new online learning platform. The platform has over 200 courses and 400 animated video summaries top global business books. According to Disrupt Africa, the startup provides year-long online learning and also acts as an external employee performance evaluator via its AI integrations.

Planet42 founders, Marten Orgna and Eerik Oja

Not left out of the pie, Planet42, a South Africa-based startup has raised €2.2-million ($2.4-million) seed round. The round was led by Change Ventures, an Estonian VC company, with participation from top Estonian tech entrepreneurs including Martin Villig, co-founder of Bolt, Pipedrive’s Ragnar Sass, MeetFrank’s Marko Virkebau, and Katana MRP’s Kristjan Vilosius. Founded by two Estonians, Marten Orgna and Eerik Oja, Planet42 is a vehicle rental company. It works with auto dealerships to offer rent-to-buy services for private clients over the long-term. The company said it will use the new funding to expand its portfolio of cars. It plans to control 100,000 cars in South Africa by 2024.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

After Bolt, Another Estonian Startup Planet42 Raises $2.4m To Allow South Africans Own Cars

June 16, 2020

Apparently, Estonian investors may have well understood the African mobility market. The game now may be not to go after the public transport sector or to launch another ride-hailing startup. Arising from the $109 million investment secured by their fellow national company, Bolt (formerly Taxify) to invade the African market, another startup (this time fintech) Planet42 has just raised over $2.4 million to conquer the South African mobility market.

“Having a personal vehicle is a necessity in South Africa, as public transport is underdeveloped while ride-hailing is prohibitively expensive for most,” says Eerik Oja, co-founder and CEO. “A family car can be a lifesaver, but banks focus on newer, expensive vehicles and only approve 15% of car financing applicants. This leaves few alternatives to lower- and middle-income households.”

Here Is What You Need To Know

This is Planet42’s seed round, consequently its first ever investment from external investors. Leading this round is Baltic-focused venture capital firm Change Ventures, which back founders based in Estonia, Latvia, Lithuania as well as Baltic diaspora entrepreneurs building their businesses elsewhere in the world. Also joining the VC firm in the investment are private backers and angel investors such as Martin Villig (Bolt), Ragnar Sass (Pipedrive), Marko Virkebau (MeetFrank), Kristjan Vilosius (Katana MRP), and several other Estonian tech entrepreneurs. That is, it looks like several Estonian investors are supporting one of their own.
With this round of investment, Planet42 will keep expanding its portfolio of vehicles. The startup is targeting a total of 100,000 cars by 2024 in South Africa alone.
As well as scaling there, the team is looking at international expansion across key emerging markets, where they will be offering motorcycles and other types of mobility, alongside cars.

Why The Investors Invested

Like had been previously stated, Planet42’s latest investment looks like several investors from Estonia are supporting one of their own. The co-founders have previously long been working in investment firms, hence the relative ease and deep connection in the industry. One of the co-founders, Marten Orgna also has a long history of the South African mobility space, hence the investors’ trust in the capacity of the team to execute.

“There are multiple markets in Latin America, Africa and South-East Asia with similar pain points — poor public transport, limited access to credit, and long commutes. Fintech has the potential to make a huge positive impact on how people get from A to B in these places, and we are proud to back Planet42 in making it a reality,” Rait Ojasaar, Partner at Change Ventures said.

A Look At What Planet42 Does

Planet42 originally launched as CarGet in 2017 to service South Africa, a market well-known to co-founder and CFO Marten Orgna, who ran African Investments for Trigon Capital. The startup partners with dealerships across South Africa to offer access to cars for personal use to its largely underbanked clientele (9 out of 10 of customers).

Planet42 uses an automated scoring algorithm to process client applications based on credit bureau, affordability, and alternative data.

If the application is approved, Planet42 analyses the customer’s validation documents, such as IDs, payslips and bank statements before purchasing the car from the dealership and renting it to the customer.

The asset is secured with tracking technology, as well as comprehensive and mechanical insurance. So far nearly 2,000 vehicles have been delivered to clients this way.

“We grew eight-fold in 2019 and we had our strongest month to date in April, despite the ongoing crisis. We see a huge need for people to improve their standards of living with better mobility, but a lack of options in the market to service them. More than 24 million people are credit impaired or have no access to finance in South Africa — that’s well over half of the adult population,” explains co-founder and CEO Oja, who gained experience in the alternative vehicle financing space as Country Manager for Mogo Finance in Estonia.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer