Planet42: Cars for those who can’t get a traditional vehicle loan
South African company Planet42 (formerly CarGet) buys used cars from dealerships which it then rents out to its customers, mainly the underbanked. Customers make monthly payments to Planet42, and have the option to buy the car at any time for the buy-out price, which decreases every month. The company was started in 2017. Co-founder Eerik Oja (32) answers our questions.
1. Give us your elevator pitch.
Planet42 is democratising mobility by enabling people ignored by banks to get access to a personal vehicle. In many parts of the world public transportation is inadequate, being a major obstacle to prosperity, limiting access to employment and educational opportunities. Banks fail to provide life-changing vehicle financing to large parts of the population due to perceived risks.
Planet42 leverages technology to mitigate risk and promote financial inclusion by buying second-hand cars from a network of motor dealers and renting them out to customers, without the need to physically see the car or meet the customer.
2. How did you finance your startup?
My co-founder Marten convinced me to quit my cosy desk job in Europe and move to Africa to launch a mobility venture. We did not have any substantial savings of our own, so we raised money from angel investors in our home country of Estonia to get started with Planet42, followed by further equity as well as debt investments as we grew. So far, we have invested nearly €8 million in South Africa.
3. If you were given $1 million to invest in your company now, where would it go?
That’s easy – we would buy 200 cars from second-hand car dealerships and rent them out to South Africans who cannot get a bank to buy a car for them.
4. What risks does your business face?
Oh, too many to count. There are always hundreds of ways things can go very wrong and completely derail your plans. But if you spend too much time worrying about all the things that can go wrong you won’t be able to get anything done. The only real risk is failure to adapt to new circumstances. Our team in South Africa has responded admirably to the challenges of Covid-19 and we have been able to keep investing in the economy by buying cars for our customers.
5. So far, what has proven to be the most successful form of marketing?
Word-of-mouth. Both car dealerships and existing customers promote us to the point where we’ve not had to do any “traditional” marketing like buying TV ads or big billboards. Simply put, we don’t have enough money to buy all the cars that potential customers want – but we’re making progress every day.
6. Describe your most exciting entrepreneurial moment.
This is a tough one, but I’d have to say that the most exciting moment was when after nearly a year worth of hard work we finally bought the first car for our very first customer. The second-most exciting moment was about a month later when that customer paid the first rental payment to us, proving that our business model can work.
7. Tell us about your biggest mistake.
I could talk about some pretty spectacular failures (for example, opening a bar with your friends is an expensive hobby, not a business), but the only real regrets I have are the things that I did not do because I wasn’t sure if I would succeed. This is a very bad strategy and a recipe for a boring life. So the biggest mistake I made was being afraid to make mistakes. I know better now so I make mistakes all the time.