Tomo, a startup founded by former Zillow execs that aims to speed up the mortgage approval process, raised a $40 million Series A round at a $640 million valuation, doubling the company’s value after it raised a $70 million seed round last year.
Founded in October 2020 by Greg Schwartz and Carey Armstrong, Tomo aims to be a “PayPal for the mortgage industry,” offering both underwritten pre-approvals and verified pre-approvals, which do not require a “hard credit inquiry” and can be completed in three hours.
The idea is to use data and software to accelerate the purchase process for new homes and help get buyers to a stronger position as they compete with other offers in a red-hot real estate market that has sparked intense bidding wars for homes.
Tomo now covers nearly a third of the U.S. market, recently launching in Michigan and Ohio. It faces competition from traditional mortgage providers and similar tech startups also aiming to digitize real estate processes and give buyers an edge.
Some online mortgage companies such as Better are facing headwinds as interest rates rise. Tomo differentiates from some competitors as it does not offer refinance mortgages.
Schwartz, CEO, spent 13 years at Zillow, helping the Seattle company grow into a real estate database behemoth. He held titles including vice president of sales, chief revenue officer, chief business officer, and most recently president of Media & Marketplace when he left in January 2020.
Armstrong joined Zillow in 2013 and also held multiple leadership roles, including director of product management, head of corporate development, and vice president of the company’s Premier Agent business. She previously worked at Boston Consulting Group and Forrester. Armstrong is Tomo’s chief revenue officer.
Tomo has 150 employees across offices in Seattle, Austin, and Stamford, Conn.
SVB Capital led the round; Ribbit Capital, NFX, Zigg Capital, Parker89, and Telesoft Partners participated.