AI-Powered Mortgage Platform Tomo Raises $20M Series B with Progressive Insurance Backing

Written by:

Steve Marcinuk

Date:

21 Mar 2025

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In an industry notorious for hidden fees and opaque pricing, Tomo Mortgage is slashing interest rates and eliminating the traditional pain points of home financing. The digital mortgage innovator founded by former Zillow executives has secured $20 million in Series B funding, bringing its total investment to $130 million. Progressive Insurance joins as a new investor alongside existing backers Ribbit Capital, NFX, and DST Global Partners.

“Outdated business practices, excessive fees, and over-inflated interest rates cost U.S. homebuyers billions of dollars every year,” explains Greg Schwartz, CEO and Co-Founder of Tomo Mortgage. “We’re on a mission to change that.”

Cutting Costs Through Technology

Tomo’s AI-powered platform streamlines sales and underwriting, reducing costs and delays. This technological advantage enables the company to offer interest rates averaging 0.50% lower than industry standards—saving the typical homebuyer approximately $4,000 at closing.

Schwartz emphasizes their transparent approach: “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.”

This customer-centric focus has earned Tomo 4.9-star reviews on Bankrate and recognition as one of the “Best Online Mortgage Lenders in 2025.”

Breaking Growth Records Despite Market Headwinds

Despite challenging market conditions in 2024, Tomo achieved 3.5x growth and expanded operations to 31 states, including Washington D.C. By year-end, the company’s purchase unit volume ranked in the top 10% of all mortgage lenders nationally.

Building on this momentum, Pete Flint, general partner at NFX, highlighted what sets Tomo apart: “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.”

He added, “We’re thrilled to back Tomo as they enter the next phase of their growth.”

Fueling the Next Phase of Expansion

The fresh capital infusion will support Tomo’s strategic growth in three key areas:

• Talent acquisition: Actively hiring loan officers and mortgage professionals for offices in Detroit, Seattle, and New York to meet growing demand
• Geographic expansion: Relocating headquarters from Stamford, Connecticut to New York City
• Product development: Enhancing technology platform and expanding product offerings

Strategic Partnership with Progressive Insurance

Progressive’s entry as a new investor signals strong confidence in Tomo’s innovative business model. This partnership connects two companies focused on using technology to transform traditional industries.

“We’re excited to invest in Tomo and to support their mission to modernize the home buying experience,” said Erwin Raeth, Corporate Development Leader at Progressive. “Our forward-thinking approach and dedication to being there for our customers by understanding their specific needs aligns with Tomo’s focus on innovation and helping each individual customer achieve their homeownership dreams.”

With its “Low rates, no gotchas” approach and new funding secured, Tomo is positioned to accelerate market penetration while delivering significant savings to homebuyers nationwide—potentially reshaping expectations across the entire mortgage industry.