Estonian startup Planet42, which combines fintech and mobility services in the South African market, has raised €2.2 million in seed funding. The round was led by Change Ventures and joined by private backers such as Martin Villig (Bolt), Ragnar Sass (Pipedrive), Marko Virkebau (MeetFrank), Kristjan Vilosius (Katana MRP) and other Estonian tech entrepreneurs.
The company partners with dealerships across South Africa to offer car access to largely underbanked clientele. “Having a personal vehicle is a necessity in South Africa, as public transport is underdeveloped while ride-hailing is prohibitively expensive for most,” explains CEO and co-founder Eerik Oja, who gained experience in the alternative vehicle financing space as Country Manager for Mogo Finance in Estonia. “A family car can be a lifesaver, but banks focus on newer, expensive vehicles and only approve 15 percent of car financing applicants. This leaves few alternatives to lower- and middle-income households.”
Planet42 uses a scoring algorithm to process client applications based on credit bureau, affordability, and alternative data. If the application is approved, the business then analyses the customer’s validation documents, such as IDs, payslips and bank statements, before purchasing the car from the dealership and renting it to the customer. So far nearly 2,000 vehicles have been delivered to clients.
The new funding will help expand the Baltic startup’s portfolio of vehicles, with the goal of renting 100,000 cars by 2024 in South Africa alone. The team is also looking at international expansion “across key emerging markets”, where they would offer motorcycles and other types of mobility, in addition to cars.
Rait Ojasaar, partner at Change Ventures, commented: “There are multiple markets in Latin America, Africa and South-East Asia with similar pain points – poor public transport, limited access to credit, and long commutes. Fintech has the potential to make a huge positive impact on how people get from A to B in these places, and we are proud to back Planet42 in making it a reality.”
Photo: Planet42 co-founders Marten Orgna (CFO) and Eerik Oja (CEO), by Jake Farra