Standard Bank has partnered with Planet42 in a R300-million deal it believes will enable the mobility startup “to shake up the passenger car market by broadening access to personal vehicles and reducing transport inequality in South Africa”.
Planet42 offers rent-to-buy car subscriptions.
Founded in 2017 in Estonia and with operations in South Africa and Mexico, the company targets people who typically cannot qualify for traditional vehicle finance.
By combining a proprietary scoring engine with a car dealership partner network, Planet42 has bought cars for more than 20 000 people, to date.
The funding provided by Standard Bank consists of R50-million in equity and a R250-million credit facility, marking the first time Planet42 has received debt funding in South African rand since the company was founded in 2017.
“We were able to put together a unique debt structure for a high growth business while also investing equity capital becoming a partner to Planet42,” says Standard Bank Corporate and Investment Banking senior VP Nimalan Reddy.
“The company was previously funded from hard currency and we were able to provide local funding to better match its needs.”
The partnership with Standard Bank will enable Planet42 to expand its fleet of vehicles to be rented out to qualifying customers, using the car-subscription model.
Planet42, backed by media and Internet company Naspers, raised combined equity and debt of around $100-million last year.
“A personal car fosters financial inclusion and economic empowerment, paving the way for a brighter and more accessible future for every South African,” states Planet42 CEO and co-founder Eerik Oja.
With Standard Bank coming on board as its first bank lender, the transaction could trigger further equity and debt investment as Planet42 aims to scale up its business across emerging markets where it sees growth potential.
For Standard Bank, the transaction ties in with “its broader vision of fostering inclusive growth and development in Africa”, where it has a presence across 20 markets.