Planet42, founded in 2017 by two Estonians, Eerik Oja and Marten Orgna, assesses a prospect’s credit risk using algorithms and data points before making a rent or buy offer. The company does this through a subscription model.
The company reports that it receives over 60,000 applications for its vehicles monthly. According to the company, its South African dealers increased their sales by an average of 26% last year. Also, it stated that demand for its services is increasing, resulting in a 37% revenue increase in 2023.
Furthermore, Planet42 claims to have purchased more than 12,000 vehicles for customers in South Africa and Mexico. In 2023, it raised $100 million to scale operations in these two countries.
The investment included $15 million in equity from shareholders, including Naspers Limited, $10 million in debt, and a $75 million credit facility from Rivonia Road Capital. Meanwhile, following the funding, Naspers closed its South Africa-focused technology investment fund, Foundry, but maintained its investment in startups.
In 2021, the company raised $30 million in equity and debt, including $6 million in equity and $24 million in debt financing. Also, in 2020, the company secured $2.4 million in a seed round and $10 million in debt in June and December.
Interview with Planet42 CEO
In an interview, the company’s CEO stated that it is “super expensive” for a business in South Africa to operate without a local currency-based debt and confirmed that the firm “has had no rand-based debt so far.”
“This is a first step to a bigger strategic partnership for us with Standard Bank,” he affirmed.
Planet42’s competitors in the industry include Autochek and Moove, which focus on ride-hailing cars and provide similar services in parts of sub-Saharan Africa. However, Autochek, like Platnet42, targets private individuals. Meanwhile, in February 2024, Moove raised a debt funding of $10 million from Stride Ventures, a sector-agnostic venture debt fund.
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These companies operate in a market worth $119.28 billion in 2021, with a projected value of $223.07 billion in 2027.
About Planet42
Founded in 2017, Planet42 is promoting transport equality by putting cars in the hands of people unfairly ignored by banks in Mexico and South Africa. It offers a rent-to-buy subscription service, providing a path to car ownership for people who otherwise wouldn’t be able to have a car. Planet42 is making a social impact in many places where mobility is an issue, helping people move around South Africa quicker and safer. It works with hundreds of car dealerships across South Africa, meaning its clients have a diverse offering to choose from. It has been certified as a CarbonNeutral® company since 2021 by Natural Capital Partners, the leading experts on carbon neutrality and climate finance.
Frequently Asked Questions
How does Planet42 work South Africa?
With your application approved, we buy the car of your choice from the dealership and then rent it to you on a subscription basis. Your monthly flat payment covers the rental as well as comprehensive insurance, GPS tracker and VAT.
Can you return a financed car back to the dealer in South Africa?
Here are the steps you can take: Contact the dealer and inform them that you are returning the car and cancelling the finance agreement. Advise them that you are exercising your rights under the CPA. Advise them that you will be taking legal action if they do not cooperate.
How does rent to own cars work in South Africa?
With rent-to-buy you make a deposit, preceded by monthly instalments for a specified period of time. You then have the choice to return the car or buy it for the remaining amount. For individuals who desire flexibility and don’t mind paying monthly, rent-to-buy can be a terrific alternative.
How to rent out my car in South Africa?
List your car and start putting your car to work. Register to create an account and then click on “List your car”. Our calculator will suggest a daily rate that you should rent your car out for. Follow the steps and make sure you add quality photos to increase the likelihood of your car being rented out.
Can a foreigner rent a car in South Africa?
International visitors will be required to produce their valid passport and drivers license at the Avis rental location.
How Profitable are Car Rental Businesses?
Car rental companies have rather low profit margins on average. Even large companies like Hertz consistently had net profit margins of around 0% to 5%. This is due to a number of factors: competition, high variable & fixed costs, etc.
