PODCAST | Closing the mobility gap: growth of car subscriptions in SA

The growth of car subscriptions in SA is the focus in this edition of the Business Day Spotlight. 

Our host Mudiwa Gavaza is joined by Eerik Oja, CEO and co-founder of Planet42, and COO Grant Wing. 

Founded in 2017, Planet42 is an artificial intelligence (AI)-based car subscription platform. The company says it aims to address transport inequality by offering an inclusive car subscription service to customers who typically cannot access traditional bank credit. 

In emerging markets, including SA, vehicle finance — and therefore vehicle ownership — is out of reach for most low- and middle-income earners.

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Planet42 is competing in a growing market that has seen the emergence of other local start-ups such as FlexClub, which has managed to raise just more than $6m. Planet42 has raised close to R1bn, the majority of which is debt financing that the company used to buy up cars. 

In 2021, Naspers’ SA venture capital unit Foundry led a $5.8m (R91m) funding round for Planet42. 

Wing says the company aims to have 1% of the used vehicle market in SA over the next three to four years, which translates to 100,000 vehicles on its balance sheet. 

Oja says the company has begun its expansion in Mexico, with plans to enter Brazil after that. The Planet42 co-founder says their strategy is to move into markets that are bigger than SA’s in terms of vehicles, particularly in emerging markets. 

The discussion centres on the car subscriptions business model; Planet42’s differentiation in the car subscriptions market; how the business works for customers and suppliers; pitfalls with traditional vehicle financing; alternative data points that the company considers when scoring customers; and prospects for funding the business. 

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• Business Day Spotlight is a MultimediaLIVE production.