In a bid to enter new global markets and capitalise on the growing demand for alternative models of car ownership, Sydney-based car subscription software company Loopit has raised $3.6 million in a seed funding round led by Tidal Ventures.
The raise, which also saw participation from Upswell Ventures and Luxem, will also be used to bolster the company’s headcount and fund further development of its tech offering.
Loopit co-founder and managing director Michael Higgins says the move toward more flexible car ownership alternatives has never been greater.
“Our data shows that almost a quarter of people today no longer own a car, and a massive 81 per cent of people would consider a car subscription for their next car rather than buy it outright. This presents a massive opportunity for the car subscription model, which is rapidly gaining momentum both here in Australia and around the world,” said Higgins, who built the company alongside his brother Paul.
“We are also seeing a strong link between the uptake of electric vehicles and car subscription. Our research shows that the majority of future EV adopters (77 per cent) prefer to subscribe rather than buy a car.
“Many consumers remain uncertain about the practicality of EV ownership, and car subscription offers a low-risk way to experience EVs without the commitment, so they can try before they buy.”
Loopit's software allows carmakers, car dealerships, fleet rental companies and start-ups to offer a car subscription service to their customers. The tech was initially built to complement the brothers’ first business, Hello Cars – an online car subscription marketplace – before it was launched in 2019 as a service for the wider mobility industry.
The company made its foray into the global market last year when it launched in New Zealand and has more recently made its debut in the UK. Loopit says it currently powers the majority of car subscription providers across Australia and New Zealand (ANZ).
The company also noted it has seen a 320 per cent spike in new car subscriptions over the past six months compared to the same time last year. According to US-based firm Boston Consulting Group, the global car subscription industry is expected to be valued at $54 billion by 2030.
“Our technology has already proven a success, and we’re excited to bring this innovative solution to the rest of the world. Our experience of operating in Australia, New Zealand and the United Kingdom, combined with fresh funding, will help us accelerate our growth across current markets and beyond,” Higgins said.
Tidal Ventures general partner Wendell Keuneman said the Sydney-based venture firm is looking forward to supporting Loopit’s growth and continued global expansion.
“Loopit’s software platform represents core infrastructure to enable a range of vendors to quickly and easily stand up a subscription-based mobility offering,” Keuneman said.
“We see a compelling case for car subscriptions as a viable alternative to traditional models. Loopit not only powers the shift to subscriptions, they improve the overall customer experience, back-office management and economics through software.
“Michael and Paul are domain experts who have experienced the difficulty of managing the end-to-end customer lifecycle of a subscription, and built the industry-leading solution to solve it.”
Get our daily business news
Sign up to our free email news updates.