Tomo, a digital mortgage lender leveraging AI-driven technology, has secured $20m in a Series B funding round.
The latest investment was led by Progressive Insurance, with additional participation from existing investors Ribbit Capital, NFX, and DST Global Partners. This brings Tomo’s total funding to $130m.
Founded by former Zillow executives, Tomo is focused on modernising the mortgage process by reducing interest rates and eliminating hidden fees. The company’s AI-powered platform streamlines underwriting and sales, helping homebuyers secure loans faster and more affordably. Tomo’s technology enables average mortgage rate reductions of 0.50%, which can save buyers approximately $4,000 at closing.
The new funding will support Tomo’s expansion across the United States, including hiring loan officers and mortgage professionals for its offices in Detroit, Seattle, and New York. The company is also preparing to relocate its headquarters from Stamford, Connecticut, to New York City to accommodate its growing team and operations.
Despite challenges in the mortgage industry in 2024, Tomo recorded 3.5x growth and is now operating in 31 states, including Washington, D.C. In December 2024, its purchase unit volume ranked in the top 10% of mortgage lenders nationwide.
Tomo CEO and co-founder Greg Schwartz said, “Outdated business practices, excessive fees, and over-inflated interest rates cost U.S. homebuyers billions of dollars every year. 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.”
NFX general partner Pete Flint added, “While other mortgage lenders tout ‘automation,’ facilitated by way of call centers or outsourced service providers, Tomo is the real deal. 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.”
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