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Naspers-Backed Planet42 Secures R300 Million from Standard Bank for Expansion

Published March 12, 2024
2 months ago

In a significant move set to bolster its financial structure and local presence, South Africa's innovative rent-to-buy vehicle startup, Planet42, has received a fresh infusion of R300 million in funding from Standard Bank. This financial injection, which is both a debt and equity deal in local currency, marks a strategic shift for the company, allowing it to retire its more onerous euro-denominated debt.

Based in South Africa and with substantial backing from global internet group and technology investor Naspers, Planet42 has become a game-changer in the auto financing industry. The company distinctively focuses on individuals who might not typically qualify for traditional bank loans, using an algorithmic approach to determine creditworthiness and rapidly provide auto financing solutions.

The latest round of funding comes as a cornerstone of Planet42's growth strategy, not just as a capital boost but also as a sign of the budding strategic alliance with Standard Bank, which stands as Africa's largest lender by assets. Through this partnership, Planet42 can deepen its commitment to democratizing access to personal transportation—a critical need in many African cities notorious for their limited public transit options.

Eerik Oja, CEO and co-founder of Planet42, highlighted the significance of the move from foreign currency loans to rand-based debt, and the ensuing cost benefits for the operations in South Africa, in an interview. The partnership with Standard Bank is heralded as a first step in what is anticipated to be a larger collaborative effort, enhancing Planet42's ability to offer more competitive auto loan services.

Planet42's model uniquely leverages sophisticated data analysis to make prompt and inclusive financing decisions, attracting over 60,000 applications per month for vehicles. In an environment where owning a car is often a necessity for both personal mobility and economic opportunity, Planet42 has positioned itself as a vital link, allowing many South Africans access to vehicles who otherwise would be left without options.

The partnership with Standard Bank could not be timelier, given the challenges faced by many South African residents due to inadequate public transportation infrastructure. The country's context underscores the importance of services like Planet42, which fulfill a pressing market need by enabling more individuals to own or rent cars seamlessly. The exponential demand for vehicles has also seen the startup's revenue soar by 37% domestically in the previous year alone.

Nimalan Reddy, Senior Vice President at Standard Bank, affirmed the potential for growth within South Africa and the greater African market, underscoring the opportunity for significant scaling. This sentiment shines a promising light on Planet42's capacity not only to grow within South Africa but to potentially expand further across the continent where the demand for flexible vehicle financing is ascending.

The news comes against the backdrop of increased interest in Africa's vehicle-financing sector, with notably Uber also exploring ways to back ventures like Moove, another African vehicle-financing startup.

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