So many startups are promising to reinvent the mortgage process that it’s hard to keep up. But for anyone who has had to go through the application process, it is clear that there is a lot of room for improvement.
The latest startup to raise venture money to make the process “smarter and faster” was founded by a couple of executives who have worked for real estate giant Zillow for years. Tomo this is a very early stage – so early that it is just getting started, coupled with the announcement that it has just raised $ 70 million in seed funding. This is a major seed round by any standard (third largest in the US, according to Crunchbase), but especially for real estate technology (arguably the largest in history).
Ribbit Capital spearheaded the funding, which also included DST Global, NFX and Zigg Capital.
In the fall of 2020, former Zillow executives Greg Schwartz and Carey Armstrong founded Tomo in Stamford, Connecticut to oppose major banks in providing mortgage loans to consumers. CEO Schwartz first came to Zillow in 2007, where he says he “built sales and revenue operations from the ground up.” Armstrong, who is Tomo’s director of revenue, previously led business strategy, product strategy and core operations for Zillow’s $ 1 billion customer service business.
Starting today in Seattle, Dallas and Houston, Tomo says it will do things like issue fully signed pre-clearances “in hours, not days” and ensure timely closings. This is especially important in competitive markets where multiple buyers are making offers at home.
He plans to use the data to force home buyers to close in just 21 days, which they say is less than half. industry average 47 days… And on top of that, he claims to offer “the lowest prices in the industry” with “customer focused service.”
The company claims that in addition to having founders with years of experience at a company like Zillow, they also strive to differentiate themselves from other competitors in the industry by being strictly customer-focused. For example, it will not refinance existing homeowners, but will focus solely on helping buyers get new mortgages.
“The big banks have never made more money, but their mortgage business has never been worse,” Schwartz told TechCrunch. “And that’s because incumbent operators have no reason to make fundamental changes.”
It’s still early days, but only time will tell if Tomo can achieve his lofty goals. No doubt he has a lot of competitors. In the last week alone, we reported on two other digital mortgage startups that have raised significant amounts of funding, including Below as well as Accept…
Tomo’s investors are confident in its potential.
Nick Huber of Ribbit Capital said his firm had ties to Schwartz and Armstrong before they even founded Tomo.
“When we found out that the two of them were working together, we immediately knew we had to be part of that journey,” he said. “We made sure to lead the seed round as the team shared more about their vision for the future of home buying, which is a bad experience that they deeply understand and have an understanding and relationship that needs to be corrected.”
NFX founder and general partner Pete Flint knew Schwartz and Armstrong differently. They were once rivals. Flint co-founded another online real estate giant, Trulia, and was its CEO and Chairman of the Board from its founding in 2005 until acquired by Zillow for $ 2.5 billion in 2015.
“Initially we were competitors, and then after the merger of Trulia and Zillow, we were active employees,” said Flint. When the pair formed Tomo, Flint tells NFX, “have yet to see a team that is so experienced and thoughtful about the entire real estate experience that has pursued the possibility of obtaining a mortgage and buying a home. “
In fact, this investment represents NFX’s largest initial investment to date.
“They are rethinking the entire software stack and creating a modern fintech company free from legacy constraints,” he added.