Many startups out there are offering promising reinventions in the mortgage process. While it has become challenging to keep up the pace, anyone who went through the process would know that there is much scope for improvement in this area.
The recent startup in the row is Tomo.
Started by a few executives who spent years at Zillow, it raised venture money intending to make the mortgage process faster and smarter. Zillow is a huge real estate company. On the other hand, Tomo is in its infancy stage, where it is only launching operations. However, it raised $70 million through seed funding. This is enormous regardless of any standard considered but specifically regarding the real estate tech space. According to reports, it is the third-largest seed funding in the United States and maybe the largest in the real estate tech space.
Tomo is a fintech startup founded in 2020. Founded by Greg Schwartz and Carey Armstrong, the company is headquartered in Stamford, Connecticut. Its headquarters covers the Northeastern US, New England and East Coast. It is set to enhance the home buying experience beginning as a digital mortgage and transaction company.
Ribbit Capital was the leading player in the financing. Some other players who took part in the financing were DST Global, Zigg Capital and NFX.
Its founders earlier worked with Zillow. They founded Stamford, CT-based Tomo in the year 2020. The aim was to cover big banks in cases where these banks offered mortgages to consumers. While working at Zillow, the CEO had built the revenue and sales operations from scratch. Armstrong, who currently offers his services as revenue officer at Tomo, earlier led business strategy, core operations, and product strategy for the $1 billion buyer services business at Zillow. He currently works as chief revenue officer of Tomo.
Tomo was recently launched in Houston, Seattle, and Dallas. It announced that it would simplify procedures such as guarantee on-time closing and issuing fully underwritten pre-approvals in a few hours and not days. This is a significant step in competitive markets where many buyers make offers on homes.
The company plans to use data to bring homebuyers to closing in as few as 21 days. It is less than half of the industry average, which is about 47 days. Moreover, the company claims to offer the lowest customer-centric service prices in the industry. For instance, the company will not refinance for people who already own a house but will only help buyers secure new loans.
NFX general partner and founder Pete Flint knew Armstrong and Schwartz before the funding but in different circumstances. Although they were competitors, NFX was impressed with the team of Armstrong and Schwartz as both were very experienced in their respective fields. That became one of the reasons why NFX invested in Tomo. The amount NFX invested in seed funding is its largest investment to date.