Subscription culture is one of the strangest occurrences of our time. Humans would rather opt to pay a monthly premium to use a service, than pay a substantial amount and own something. What if… the same was true for cars? A startup called Planet42 is raising funds to bring you just that.
In South Africa, most people have a high level of car-requirement to go about their daily lives. Public transport isn’t widespread, while ride-hailing services are just too expensive to use everyday. We get it. Cars are expensive and not everyone can secure a bank loan to acquire one. That’s where Planet42’s plan comes in. Cars, but on a subscription model.
A car subscription?
“Our ambition is to make mobility accessible to everyone who can afford it, including the people that banks deem ‘blacklisted’, which comprise more than 90% of our clientele. We’ve already signed up over 300 car dealerships across South Africa, but there are still several thousand to go. And that’s just the first market we have tackled. This round will open more doors in South Africa and beyond for us,” staus Eerik Oja, the CEO and co-founder of Planet42.
Launched in Estonia and now focusing on growing in South Africa, the startup plans on revolutionising transport for those who need it most. If you’re asking yourself: “Isn’t this just… rent-to-own?” You’re not alone. This plan sounds suspiciously similar to vehicle rent-to-own services that are already well and thriving in South Africa.
According to a press release, Planet42 “… uses a proprietary scoring algorithm to automatically assess the risk of individual customers. If the decision is favourable, the customer will choose a suitable car from any dealership that Planet42 has partnered with. The company then purchases the car from the dealership and rents it to the customer on a subscription basis. The assets are secured with tracking technology, as well as comprehensive and mechanical insurance.”
But we’ll have to wait and see how Planet42 differentiates itself in a crowded market. The startup has just secured $10 million in the form of a debt investment from US-based Lendable Inc, an institutional debt investor. To date, Planet 42 has bought and delivered over 2,000 second-hand cars in South Africa, which is its primary market.