TomoCredit raises $22M to make credit scores ‘obselete’ – TechCrunch

When Kristy Kim started TomoCreditIn the early part of 2019, she was on a mission toInternational students can be assisted more easily credit.

ThreeThis mission evolved over the course of two and a quarter years. TomoCredit, which is the goal toYoung adults in good financial condition but not having enough money can get help creditscore is not only about immigrants.

Today, TomoExpanding its focus toThe following people comprise a larger group. United StatesWho wants? “to build credit fast,”SMBs as well as domestic students.

“As we are getting bigger, we are realizing that the target market we can address is way bigger than what we were expecting. We now know that the credit invisible goes way beyond immigrants,”CEO Kim Submitted TechCrunchIn an interview 

TomoDifferent from other credit offerings out there in that it doesn’t rely on FICO scores to underwrite. RatherIt is applicable to a “proprietary”Underwriting algorithmTomo Score) toName “high potential borrowers”Without a credit score. The TomoCredit cards are not required creditCheck, there is no deposit, no APR at 0% and no fees Thefintech Offers to cardholders creditLimits up toBased on their cash flow, $30,000 ItInterchange fees are what make it money toNot consumers, but merchants.

Sounds risky? WellIt is.

But Kim maintains that the company’s default rate — at 0.11% — doesn’t reflect that risk. (For context, American ExpressReports indicate a 2.5% default. 

“Our customers spend thousands per month, way more than any other fintech customers,”She said. “We learned this by talking to other neobanks.”

“Our customers are not in financial trouble…Once you identify them, and give them a card, they spend a lot and don’t default. Our performance has been great and that gave us and our investors the confidence to scale.”

ToHelp us offer more credit to even more Gen Zers, TomoCredit announced today that it had raised $22 million to fund its acquisition of a subsidiary company. SeriesB funding round at $222 million post-money value ItA $100 million loan financing facility was also obtained. SinceSince its inception TomoCredit has raised $39 Million in equity.

TheRaising follows a year where the startup reported a 1,000% increase in revenue. KimDescribed as “mainly organic.” TomoIs on track toShe expects to see an additional 1,000% increase in revenue year-over-year. said.

Kim declined toIdentify how many cardholders TomoIt has not, but it did state that it had received 2.5 million applications in the past. 

The fundraise, KimNotes: “locked deal”Before the market turned, valuation was reached earlier in the year.

The company plans toApply the new capital toDiversifying its product offerings includes auto loans and mortgages. Yes, mortgages. KimThe fact that the mortgage market is being hammered at the moment is a chance.

“During the pandemic, we saw a big surge in applications. During a market downturn, we are seeing another peak of customers coming to us,”She shared her story TechCrunch. “During times of uncertainly, customers become more mindful of personal finances.”

Since inception, TomoHe has always operated with a lean mentality. TodayIt employs 50 people. PartIt will also use its new capital to hire more engineers and product people. Kim said.

Interestingly, Morgan Stanley’s Next Level FundAnd MastercardParticipated in the “oversubscribed”Equity portion of the financing included participation by GoldHouse Asian HustleNetwork and Hyphen Capital. TheBy Silicon Valley Bank. 

“As a first-generation South Korean immigrant, I wanted to help immigrant communities to reach their American Dream faster with TomoCredit,” Kim said. “It has been wonderful to partner with minority-focused funds who truly understand Tomo’s mission.” 

Alice VilmaCo-portfolio manager Morgan Stanley’s Next Level FundThat invests primarily in tech-enabled early-stage companies and tech-enabled businesses with women or diverse managers as part of their founding team. She saidShe was drawn toBack TomoBecause she was impressed with credit Kim’s ability toYou can identify a problem and make it a financial product.