South Africa-based rent-to-buy start-up Planet42 has announced a successful fundraising round, securing local-currency debt and equity funding from Standard Bank. The Naspers-backed firm, which has raised approximately US$150 million to date, received R300 million from Standard Bank to aid in repaying costly euro-denominated loans.
CEO and co-founder of Planet42, Eerik Oja, highlighted the significance of this funding, stating, “We have had no rand-based debt so far, and that is obviously super-expensive for a business operating in South Africa.” Oja sees this as the initial step toward a broader strategic partnership with Standard Bank, especially as the start-up intensifies its focus on providing car financing to individuals who may face challenges securing loans through traditional banks due to regulatory constraints.
Given the lack of comprehensive public transportation in many African cities, personal vehicle ownership and ride-hailing services have become crucial. Planet42 has emerged as a key player in this landscape, receiving over 60,000 applicants for its cars every month. The start-up utilizes algorithms and data points to evaluate a potential customer’s credit risk, offering a swift decision on renting or purchasing a car within minutes.
The growing demand for its services contributed to a remarkable 37% increase in revenue for Planet42 in the past year. The new funding from Standard Bank is expected to fuel the company’s expansion plans, enabling it to tap into untapped markets and cater to a wider audience.
Standard Bank Senior Vice President Nimalan Reddy expressed optimism about the collaboration, stating, “In South Africa, and potentially in the rest of Africa, there is a lot of scaling up that can happen.” This funding not only addresses Planet42’s immediate financial needs but also lays the groundwork for a strategic alliance that could further propel the growth and reach of the rent-to-buy start-up in the competitive African market.
