Newly launched real estate financial tech startup Tomo raised $70m in seed funding, touting it to be the third-largest seed round within the US.
Ribbit Capital led the financing, which additionally included participation from DST International, NFX and Zigg Capital.
Launching at present in Seattle, Dallas and Houston, Tomo will be able to issue fully underwritten pre-approvals “within hours, not days” and guarantee on-time closing. This is particularly important in competitive markets with multiple buyers making offers on homes.
It plans to use data to get homebuyers to closing in as little as 21 days, which they say is less than half of the industry average of 47 days. It claims it will offer “the lowest rates in the industry” with “customer-obsessed service.”
The company claimed it is different from other competitors in the space in that they are strictly focused on the buyer. For example, it won’t do any refinancing for existing homeowners but focus strictly on helping buyers secure new mortgage loans.
The firm will originate Fannie Mae and Freddie Mac loans. The company would not disclose loan amounts it provides. The Federal Housing Finance Agency said the maximum conforming loan amount for a Fannie- or Freddie-backed mortgage in 2021 would be around $550,000. Tomo will also connect homebuyers with brokers who can help move an offer to the top of a seller’s pile to help with closing.
Former Zillow executives Greg Schwartz and Carey Armstrong founded Stamford-based Tomo in the fall of 2020 to take on big banks when it comes to providing mortgages to consumers. CEO Schwartz first joined Zillow in 2007 where he built the sales and revenue operations from the ground up. Armstrong, who serves as Tomo’s chief revenue officer, previously led business strategy, product strategy and core operations for Zillow’s $1bn buyer services business.
Tomo’s website does not provide details about its services, listing only its investors and leadership team. It explains its name, which was “inspired by Omotenashi, a Japanese service philosophy in which needs are anticipated and thoughtfully met.” Tomo has offices in Seattle, Austin, and Stamford. The company employs about 100 people and expects to reach more than 180 employees this year. It plans to launch in additional markets in 2021.
The mortgage sector is indeed picking up speed as in the past week alone, two other digital mortgage startups raised significant funding rounds, including Lower and Accept.
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