South Africa-based fintech startup Planet42 has secured around $2.4 million in a fresh funding round, the media reported.
The funding round for Planet42 was led by Change Ventures with participation from Martin Villig (Bolt), Ragnar Sass (Pipedrive), Marko Virkebau (MeetFrank), Kristjan Vilosius (Katana MRP), and several other Estonian tech entrepreneurs.
The startup focuses on increasing access to mobility to the underbanked in the country. Reportedly, it will use the recently raised funds to expand its portfolio of vehicles.
Planet42 uses an automated scoring algorithm to process client applications based on credit bureau, affordability, and alternative data. What it does is it partners with dealerships across South Africa to offer access to a personal car to its largely underbanked clientele.
Eerik Oja, co-founder and chief executive officer (CEO) of Planet42 told the media, “Having a personal vehicle is a necessity in South Africa, as public transport is underdeveloped while ride-hailing is prohibitively expensive for most. A family car can be a lifesaver, but banks focus on newer, expensive vehicles and only approve 15 per cent of car financing applicants. This leaves few alternatives to lower- and middle-income households.”
“We see a huge need for people to improve their standards of living with better mobility, but a lack of options in the market to service them. More than 24 million people are credit impaired or have no access to finance in South Africa – that’s well over half of the adult population.”
So far, Planet42 has delivered more than 2000 cars to its clients. Reportedly, the startup is targeting a total of 100,000 cars by 2024 in South Africa alone.