Loopit raises A$3.95 million to fuel automotive industry’s shift towards flexible car subscriptions
Loopit, a leading provider of mobility software, has successfully closed a A$3.95 million pre-Series A funding round to fuel its expansion across the U.S. market. This investment bolsters Loopit’s role as a key technology enabler, empowering Original Equipment Manufacturers (OEMs), dealerships, and rental companies to seamlessly transition to flexible car access models, including car subscriptions and micro leasing.
The latest funding includes contributions from existing investors Upswell, Common Sense Ventures and Luxem, along with new participants AeroCorp, a major AVIS licensee, and RAC venture capital arm BetterLabs. The capital injection will enhance Loopit’s capabilities to widen its U.S. market presence and sets the stage for a Series A round later in 2024.
Loopit Co-Founder Michael Higgins highlights the shift towards more affordable subscription services driven by economies of scale and increasing confidence from automakers. He referenced the French government’s subsidized flexible EV leasing program, which saw its yearly targets double in just six weeks, as an indication of strong market demand.
Higgins notes that the business model’s success indicates that affordability and access, not technology, will play crucial roles in mainstream EV adoption. “Car subscription is already financially attractive for consumers, particularly consumers who prioritize flexibility,” Higgins said. “As automakers refine their pricing models, we anticipate further reduction in costs.”
According to Higgins, changing consumer preferences, especially among younger demographics, are driving the expansion of the still-nascent car-as-a-service market.
Higgins emphasizes that the cost of subscribing is currently comparable to car ownership when considering maintenance, depreciation, and other expenses. However, he foresees subscriptions becoming the more economical choice for most people as prices continue to fall. And investors agree.
“The automotive industry is undergoing rapid innovations with electric and autonomous vehicles,” adds Higgins. “The next significant breakthrough will be in transforming the car ownership experience, especially as vehicles increasingly incorporate advanced technology.”
Loopit provides flexible and robust mobility management software to automakers, dealerships, fleet and rental providers including Porsche, Subaru, Polestar and SIXT.
“Access is becoming more appealing than ownership,” Higgins said. “We are confident that flexible ownership alternatives will soon be the default choice for hassle-free, affordable vehicle access.”
As costs align and flexibility increases, models like micro-leasing and car subscriptions are poised to redefine vehicle access, much like ride-share services like Uber and Lyft transformed the taxi industry or streaming services transformed media consumption.
