Mortgage fintech Tomo raises $40 million, expands operations

Lending fintech Tomo Networks raised $40 million in a Series A funding round, doubling its valuation to $640 million.

The Stamford, Connecticut mortgage firm, founded in 2020 by two former Zillow executives, will use the new capital to increase investments in software development, data science and industry relations. Tomo raised $70 million in 2021 in one of the mortgage industry’s biggest seed rounds ever, bringing its valuation to $312 million at the time, and today counts total equity financing at $110 million.

“We’ll make a fierce investment in building our own digital platform for underwriting so the first part of the transaction, the customer experience, is a beautiful, e-commerce-like experience,” said Greg Schwartz, Tomo co-founder and CEO, in an interview with National Mortgage News.

Tomo strives to improve the digital homebuying experience and focuses on the $1.7 trillion-dollar purchase lending market, forgoing refinances altogether, a decision made at the height of the now-waning refi boom. The firm was founded by Carey Armstrong, Zillow’s former vice president of its Premier Agent business, and Schwartz, Zillow’s former president of media and marketplace.

SVB Capital led the latest fundraising round, which included returning investors Ribbit Capital, NFX and Zigg Capital. New investors include venture capital firms TeleSoft Partners and Parker89.

“In less than a year since they launched their online platform, the team at Tomo has proven they have the drive and the experience to transform the mortgage industry,” said Tilli Bannett, managing partner at SVB Capital, in a press release.

The lender, which claims it has closed 98% of its loans on time, also announced expansion into Michigan and Ohio, adding to Texas, Florida, Washington, Connecticut and Colorado. Tomo added jumbo loans in January and Schwartz hinted at bringing on additional mortgage products in the coming months.