AFRICA – Planet42, a fintech company, has reported raising US$2.4 million in a seed round led by Change Ventures with support from private investors including Martin Villig (Bolt), Ragnar Sass (Pipedrive), Marko Virkebau (MeetFrank), Kristjan Vilosius (Katana MRP), and others.
Planet42 seeks to democratize access to mobility to the underbanked. The company launched as CarGet in 2017 to service the South Africa market. Planet42 partners with dealerships across South Africa to offer access to a personal car to its largely underbanked clientele reportedly 9 out of 10 of customers.
Planet42 uses an automated scoring algorithm to process client applications based on credit bureau information, affordability, and alternative data. If the application is approved, Planet42 analyses the customer’s documents, such as IDs, etc. before purchasing the car from the dealership and renting it to the customer.
The asset is secured with tracking technology, as well as comprehensive insurance. Planet42 states that nearly 2,000 vehicles have been delivered to clients this way.
“Having a personal vehicle is a necessity in South Africa, as public transport is underdeveloped while ride-hailing is prohibitively expensive for most. 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,” explains Eerik Oja, co-founder and CEO.
“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.”
The capital provided by the funding round will be used to expand its portfolio of vehicles. Planet42 is targeting a total of 100,000 cars by 2024 in South Africa alone. The company is planning to expand in other emerging markets as well.
Oja states they want to help people across the world commute with ease, earn more, and feel secure.
“No one deserves to be deprived of the opportunities something as basic as a personal vehicle brings,” Oja states.
Liked this article? Subscribe to DealStreet Africa News, our regular email newsletter with the latest news, deals and insights from Africa’s business, economy and more. SUBSCRIBE HERE