Below is our recent interview with Eerik Oja, CEO and Co-Founder of Planet42:
Q: For those who have never heard of it, how would you describe Planet42?
A: Planet42 offers car subscriptions for people that need a personal vehicle, but are ignored by traditional players like banks. We put second-hand cars in the hands of people who would otherwise have to rely on dysfunctional and frankly dangerous public transportation.
Unlike most new car subscription companies popping up in Europe and the US, where the model is to improve the car purchasing experience with flexibility and convenience for younger generations used to doing everything through their phones, our car subscription focuses on a different demographic. Our customers are people with very limited access to personal mobility in particular geographies. We serve a much more basic need than simple convenience using basic second-hand cars.
It is more important for us to empower people who have the necessity to move around to get a means of transport, rather than improve the experience of people who already have this freedom. Our mission is to democratise access to mobility.
Q: Where are your services available at the moment?
A: Our home market is South Africa. We are also considering a few other large emerging markets where we see a similar environment. We look for places that face structural challenges making it harder for people to access personal mobility, such as lack of efficient public transportation or banks that only offer car financing to the wealthy. Our aim is to expand to places where we can help people overcome those barriers.
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Q: You’ve recently raised $10,000,000 in funding; can you tell us something more?
A: The money will be used to buy cars in South Africa, where we have already bought and delivered over 2,000 cars. We believe there is room to scale up to more than 100,000 cars by 2024. This debt facility also helps us to reduce our relative cost base, meaning we can pass savings onto our customers and so be able to serve even more people.
The way we will scale is by focusing on our relationship with car dealers. We work with dealerships directly and have already signed up over 300 across the country to offer our services. We will also scale our sales operations and sign up the remaining 3000 or so dealerships in South Africa.
Q: What are your plans for the first half of 2021?
A: We now have the financial firepower to buy thousands of new cars. Our talented team based in Johannesburg is hungry for growth and we intend to invest heavily in expansion throughout the challenges posed by COVID-19, as we did in 2020. Meanwhile the founders of Planet42 are already working on future funding, which will include both equity and debt investments. In 2021 we will also expand to one new market in Latin America.
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Q: What’s the best thing about Planet42 that people might not know about?
A: It is worth stressing again that Planet42 is not interested in competing with banks, we serve the customers that banks turn down due to unreasonably stringent criteria.
Aside from that I am very proud that Planet42 is the first company offering car subscription in South Africa. We have built up a very quick and straightforward process for customers to pick a car from any dealership we cooperate with and get approved instantly. Every customer has an option to buy out their car at any time at no extra charge, or return it after six months for a nominal charge in case they wish to upgrade or just stop the subscription because of financial difficulties like loss of a job due to the pandemic.
In fact, we are now happy to see many old customers returning for a new car subscription after they returned their previous car during the uncertainties of the hard lockdown.