Planet42 Secures $16 Million Funding Boost from Standard Bank

South African car subscription startup, Planet42, has secured a substantial $16 million (R300 million) in funding from Standard Bank, encompassing both local currency debt and equity.

This injection of capital is earmarked for the repayment of higher-cost euro-denominated loans, marking a strategic financial move for the company.

This recent funding milestone supplements the $150 million total investment that Planet42 has amassed thus far, notably including a significant $100 million secured in 2023.

Established in 2017, Planet42 distinguishes itself through its utilization of data analytics and algorithms to evaluate credit risks, offering customers adaptable car rental or purchase arrangements.

Currently, the company’s operational focus spans South Africa and Mexico, where it has successfully delivered over 12,000 vehicles.

The financing obtained in 2023 comprised $15 million in equity, $10 million in debt, and a $75 million credit facility, reflecting a diverse funding strategy.

This funding round signals a pivotal shift for Planet42, which previously relied heavily on foreign currency loans.

The CEO emphasized the exorbitant costs associated with operating without local currency debt, underscoring the strategic importance of securing this funding from Standard Bank.

Furthermore, the partnership with Standard Bank holds the potential for a more expansive strategic collaboration, according to the CEO’s remarks.

Despite its successes, Planet42 faces competition in the African market from companies such as Autochek, catering to individual car ownership needs, and Moove, which specializes in ride-hailing vehicles across certain parts of sub-Saharan Africa.

Source: Empower Africa