The push to embark on expansion follows a report by US-based international management firm Boston Consulting Group that said the global car-subscription industry was expected to be valued at $A54 billion by 2030.

It is also being driven by changes in car ownership and transport needs, particularly among younger consumers, which is evident by a slide in youths applying for a driving licence in major markets. In Paris, for example, the average age at which a person is likely to apply for a car licence is now 26.

Loopit co-founder Michael Higgins said: “The move toward more flexible car-ownership alternatives has never been greater.

“Our data shows that almost a quarter (24 per cent) 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 here in Australia and around the world.

“Our software 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.”

Paul and Michael Higgins

Mr Higgins, with his brother Paul, initially built the software to support their own car-subscription marketplace HelloCars, before realising the opportunity to provide it more broadly across the mobility industry.

The brothers are the sons of Rodney Higgins, who, with his own brother Peter, founded Mortgage Choice in 1992 and provided the initial financial backing for HelloCars.

Loopit’s software-as-a-service (SaaS) platform facilitates the end-to-end subscription process, handling both the customer-facing touchpoints and the back-office management required to offer a car subscription to customers simply and easily.

In addition to the falling number of car buyers, Mr Higgins said Loopit had seen 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,” he said.

“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, which launched in early 2019, expanded into New Zealand in 2021 and into the UK this year. It currently powers the majority of car-subscription providers across Australia and New Zealand and has reported a 320 per cent increase in new car subscriptions over the past six months compared with the preceding period. 

The $A3.6m funding round was led by Seed-first venture capital firm, Tidal Ventures, which invests in Australian and New Zealand businesses on the path to international expansion. 

The capital will enable Loopit to expand its headcount, accelerate revenue growth, continue its global expansion, and fund further development of its market-leading proprietary technology. 

Tidal’s portfolio includes businesses Shippit, FrankieOne and Operata. Tidal general partner, Wendell Keuneman, said he saw a “compelling” case for car subscriptions as a viable alternative to traditional models.

“Loopit’s software platform represents core infrastructure to enable a range of vendors to quickly and easily stand up a subscription-based mobility offering,” he said.

“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. 

“We’re now looking forward to supporting Loopit’s growth and continued global expansion.”

By Neil Dowling