South African car subscription rental company Planet42 successfully obtains R1.8 billion in funding

Naspers Ltd., an early investor in China’s Tencent and the company’s largest shareholder, is supporting rent-to-own vehicle company Planet42 in a $100 million (R1.8 billion) loan and equity fund-raising.

Planet42 Chief Executive Officer Eerik Oja stated in an interview that the cash will be used for growth in South Africa, where Naspers is located, as well as additional expansion in Mexico. The company, which was launched in 2017, primarily provides automobile finance to customers who are unable to obtain it through banks.

ARS Holdings and Rivonia Road Capital are among the other investors in the stock and debt financing.

“In South Africa, we want to put the pedal to the metal using this new financing to quickly add about 10,000 more cars to the fleet,” he said. “In Mexico we are exploring where best to find customers, and how to switch on dealerships, so it takes time to get the ball rolling, but we have started to test the market and have about 250 cars that side.”

With its Foundry fund, Naspers, the parent company of Prosus, has made eleven investments in South African-focused businesses. According to statistics provided by Briter Bridges, a market intelligence firm, African entrepreneurs raised a record $5.3 billion last year. South Africa took a sizable chunk of that, despite a global recession in the technology industry.

Naspers has purchased ownership in Planet42 for the second time. According to Oja, the mobility company has already deployed a fleet of around 15,000 automobiles to low-income workers like as teachers and police officers who struggle to obtain standard vehicle financing.

Planet42, co-founded by Oja and Marten Orgna, assesses a potential customer’s risk level and generates an offer to buy a car from a dealership of choice within minutes, according to Oja.

In South Africa, the company already has about a thousand vehicle dealerships in its network, with approximately 40% of its sales coming straight from the dealerships, he added.

Oja and his partners chose to expand into Mexico after researching markets such as Nigeria and Brazil and determining that the North American country had the closest parallels to the South African market.

“It’s very similar to South Africa in terms of income and a car penetration and development or lack there of, of financial services,” Oja said. “Plus public transportation there is slow, unreliable and dangerous, opening up a big market opportunity.”