Investors are betting that in-person mortgage applications are going the way of the dodo.

A new startup founded by two former Zillow executives, with the goal of reinventing the already-crowded, competitive digital mortgage marketplace, received a massive $40 million infusion of initial funding from individual investors and venture capital firms, the company announced this week.

The startup, Tomo Networks, is headed by Greg Schwartz and Carey Armstrong. Until recently, the two directed Zillow’s Premier Agent division, the best-performing branch of the Seattle-based digital real estate marketplace.

Buying real estate “is opaque, painful and confusing to consumers,” Schwartz said in an interview. “We’d like to turn that into a predictable, easier and less-dramatic transaction … using a combination of modern digital tools and world-class realtors and loan officers married in an online platform.”

Details of how exactly Tomo plans to carry out its vision are still vague. The product launches early next year, and until then, the company — which will have offices in Capitol Hill, as well as in Austin, Texas and Stamford, Connecticut — is operating in something akin to stealth mode.

Whatever Tomo launches, though, will face stiff competition from established real estate players.


Online lender, which offers mortgages in 80% of U.S. markets, is valued at close to $4 billion and seems likely to go public soon; Zillow, Redfin and Compass are also getting in on the digital mortgage business. Other online lending startups, including Roostify and Blend, have years on Tomo.

Rocket Companies, the parent of Quicken Loans and the nation’s largest mortgage lender, originated 98% of its home loans online in 2019, according to the New York Times. The company went public in August, amid a period of unprecedented mortgage lending activity propelled by historically low rates.

Tomo, though, describes itself as being in the fintech — short for financial technology — industry, not just the mortgage business. Online mortgages, in other words, will just be the first step for Tomo, Schwartz said.