The Estonian fintech startup, Planet42, that operates in Africa and focuses on providing access to mobility to the underbanked, has raised USD2.4 million in an investment round.
The seed round was led by Change Ventures. Private backers include Martin Villig (Bolt), Ragnar Sass (Pipedrive), Marko Virkebau (MeetFrank), Kristjan Vilosius (Katana MRP) and several other Estonian tech entrepreneurs.
The company 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. Planet42 partners with dealerships across South Africa to offer access to a personal car to its largely underbanked clientele (nine out of ten of customers).
Nearly 2,000 cars delivered to clients
“Having a personal vehicle is a necessity in South Africa, as public transport is underdeveloped while ride-hailing is prohibitively expensive for most,” Eerik Oja, a co-founder and the CEO of the company, said in a statement. “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.”
Planet42 uses an automated scoring algorithm to process client applications based on credit rating, affordability and alternative data. If the application is approved, the company 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.
Over half of the adult population in RSA are credit impaired
“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,” Oja, who gained experience in the alternative vehicle financing space as Country Manager for Mogo Finance in Estonia, asserted.
Planet42 will use the funds raised to 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.
“We 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 stated.
Cover: Planet42’s founders Marten Orgna and Eerik Oja. Photo by Jake Farra.