Tomo Mortgage, an AI-powered digital mortgage lender, has secured $20 million in a Series B funding round, bringing its total investment to $130 million, company executives announced Tuesday.
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Tomo Mortgage, an AI powered digital mortgage lender, has secured $20 million in a Series B funding round, bringing its total investment to $130 million, the company announced Tuesday.
The latest round introduces Progressive Insurance as a new investor, joining existing backers Ribbit Capital, NFX and DST Global Partners.
The latest funding will fuel team expansion and product development. To meet rising demand, Tomo is hiring loan officers and mortgage professionals in Detroit, Seattle and New York. Additionally, the company will relocate its headquarters from Stamford, Connecticut to New York City.
Erwin Raeth | Progressive Corporate Development Leader
“We’re excited to invest in Tomo and to support their mission to modernize the home buying experience,” Corporate Development Leader at Progressive Erwin Raeth said in a statement. “Our forward-thinking approach and dedication to being there for our customers by understanding their specific needs aligns with Tomo’s focus on innovation and helping each individual customer achieve their homeownership dreams.”
Tomo Mortgage was founded in 2021 by former Zillow executives, launching in three markets with $70 million in seed funding. The company set out to provide quick mortgage reapproval’s, on-time closings, competitive rate matching and homebuyer-agent referrals through a partnership with real estate coach Tom Ferry.
“Outdated business practices, excessive fees, and over-inflated interest rates cost U.S. homebuyers billions of dollars every year,” CEO and Co-founder of Tomo Greg Schwartz said. “Tomo is on a mission to change that,” “We use AI to deliver low rates without the gotchas. No mystery fees. No missed closing dates. No ‘rate-keeping,’ where you have to talk to a salesperson before getting a price. People love our honest, upfront pricing and seamless customer experience. We’re thrilled our investors recognize our unique vision and value.”
Greg Schwartz | Co-founder and CEO of Tomo
Tomo was backed by Ribbit Capital, DST Global, NFX, SVB Capital and Zigg Capital in its early stages, with many of the lenders still behind the company.
The company has grown 3.5 times over the past year, despite a stagnant mortgage industry. The company attributes its success to AI-driven automation, which streamlines sales and underwriting, making mortgage approvals faster, more accurate and more affordable than other lenders.
“While other mortgage lenders tout ‘automation,’ facilitated by way of call centers or outsourced service providers, Tomo is the real deal,” Pete Flint, general partner at NFX, said. “They’re taking a radically different approach, using proprietary technology to cut out origination fees and processing delays in a way that we’ve not seen in the industry so far. We’re thrilled to back Tomo as they enter the next phase of their growth.”
Pete Flint | General Partner at NFX
On average, Tomo saves homebuyers $4,000 at closing, offering interest rates 0.50 percent lower than industry standards and 1 percent lower than major lenders.
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