Investing in Tomo Mortgage to support simplifying the mortgage process

One way that consumers can save money in the homebuying process is to shop around for mortgages. However the majority of homebuyers, 54%, do not even bother.

That is changing: according to a recent survey, 62% of millennials said they obtained multiple mortgage offers compared to just 28% of baby boomers.

Enter Tomo Mortgage (Tomo), a company that utilizes proprietary technology and Gen AI to not only improve the borrower experience, but also to reduce the cost of mortgage fulfillment. These cost savings are passed on to borrowers, which result in lower costs of customer acquisition for digitally-native, price comparison shoppers.

Tomo’s strategy has driven a strong performance in a challenging environment, which is why we are so excited to spotlight their unique perspective.

Success during a tough mortgage environment

Mortgages remain big business in the United States despite recent headwinds. Last year, originations rose to $1.69 trillion in 2024, up nearly 13% from 2023. That growth in originations came as sales of existing homes in the United States fell to their lowest level since 1995, continuing an overall downward trend.

Tomo understands these market fundamentals and has used its proprietary technology to lower operating costs and design a simple user experience, allowing it to offer competitive mortgage rates to a broad – and growing – customer base.

This dual focus has helped Tomo thrive despite the challenging mortgage industry environment. During 2024, the company achieved 3.5x YoY mortgage volume growth.

Tomo’s products and impact

Tomo, founded in 2020, wanted to create a product that helped mortgage rater shoppers find the best deal with a fast and consistent closing timeline through an easy-to-use platform.

Tomo enables its customers to have a truly digital and modern mortgage experience – customers sync accounts and directly upload documents rather than swapping emails. In addition, it has a continuous, and automated, mortgage underwriting process, eliminating timely – and costly – back-and-forth.

Thanks to Tomo’s focus on efficiency, they can approve applicants within days, not weeks, for a mortgage. Once approved, homebuyers can quickly re-run their mortgage application at any time if they want to take advantage of interest changes or increase their down payment size.

Part of Tomo’s value proposition is its commitment to price transparency. For example:

• It recently launched TrueRate, a tool that tells people the “true” rate they should get from a mortgage lender, based on their individual buying situation and a historical analysis of loans from over a thousand mortgage lenders. The tool also highlights competing lenders that offer low rates, even if Tomo Mortgage is not on the list.
• When Tomo saw that lenders were not all advertising rates the same way – some advertised lower rates with high fees for point buy-downs included – they made sure their own rates were 100% transparent. Their online pricing tool simplifies rates and point options so that people can assess whether extra points were a good fit for their needs.

So far, on average, Tomo has saved the typical homebuyer $4,000 at closing and its interest rates are, on average, 0.50% lower than the industry and up to 1% lower than some of the biggest lenders.

Driving innovation in the mortgage market

Tomo’s Co-Founder and Chief Executive Officer Greg Schwartz previously oversaw strategy, sales and product development at Zillow. Greg and the Tomo team are passionate about revolutionizing the mortgage market while keeping homebuyers at the heart of their product suite.

Citi Ventures is excited to support the Tomo team as it makes the mortgage market easier to navigate and more affordable. We congratulate Greg and his team on their recent success and look forward to what is to come!