Kapor Capital, Square co-founder Sam Wen back TomoCredit in its $10M Series A funding round

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Building a credit history can be difficult if you are a consumer who is having trouble getting credit in the first place.

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To enter tomocredit, which has developed a credit card focused on building credit history for first time borrowers. The San Francisco-based startup is announcing today that it has raised $10 million in a Series A funding round co-led Kapoor Capital and a subsidiary of KB Investment Inc. (KBIC), South Korea’s leading consumer bank. Sam Wayne, co-founder of Lewis & Clark Ventures, AME Cloud Ventures, Knollwood Investment Advisory, WTI, Bronze and Square Also participated in Series A financing.

The new capital comes just seven months after TomoCredit raised $7 million in seed funding, raising its total to $17 million this year. The company also announced today that it has appointed Ash Gupta, former CRO of American Express, to its board.


TomoCredit co-founder and CEO Christy Kim came up with the concept for the company in her early 20s after being rejected multiple times for auto loans.

Kim, who immigrated to the US from South Korea with her family as a child, was disappointed that her lack of credit history proved to be such a hindrance, despite having a job “and positive cash flow”.

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So she teamed up with Dmitry Kashlev, a Russian immigrant, in January of 2019 to create a solution for other foreign-born individuals and young adults facing similar credit challenges. That fall, the startup (short for Tomorrow’s Credit) was accepted into the TechStars-run Barclays Accelerator.

Fintech offers a credit card that aims to help first-time borrowers build a credit history based on their cash flow rather than their FICO or credit report rating. Kim believes its biggest differences are that it has no fees, no APR and no credit bridge. Traditional credits rely heavily on product fees and APRs, she said, while TomoCredit makes money through merchant fees.

image credit: tomocredit

TomoCredit is powered by Finicity (which was acquired by Mastercard last year), and leverages that company’s data network and open banking technology to enable it to “securely secure” applicants’ bank accounts to obtain financial data for underwriting purposes. to be able to access”.

Once approved, applicants receive tomocredit mastercard. Target “The millions of individuals lacking credit scores in the financial system, giving a diverse group of consumers the opportunity to better position themselves as qualified candidates for a mortgage, auto loan, or other major life purchase,” The company said. .

According to Kim, TomoCredit has already pre-approved more than 300,000 customers and expects to issue a total of 500,000 cards by the end of the year.

“We have grown 10 times this year since the beginning of 2021,” Kim said. “Still, this round came together earlier than expected.”

Something that has been surprising to Kim has been the interest of a wide variety of consumers.

“Initially, we thought that international students and expats would be most interested in our product,” she told Nerdshala. “But after launching, we’ve realized that so many people can benefit – from gig economy workers to YouTubers who haven’t had a chance to build credit yet. is big. “

In early 2022, the company plans to roll out Tomo Black Card, a product that is “showing good performance,” to some of its existing customers. It is currently testing it with some of its existing user base.

“This is a premium product that can grow with our customers, who we want to retain over the next 10 to 20 years,” Kim said. “We don’t want our product to be a stop-gap solution.”

image credit: tomocredit

The startup plans to use its new capital in an effort to “rapidly raise credit scores” to increase hiring and features such as weekly autopay and higher credit limits. Currently, TomoCredit has about 30 employees, up from 10 at the time of its last pay raise in February.

“My main focus is to recruit top talent,” Kim said, noting that the company had already hired “some senior people from Wells Fargo.”

“When we recruit and get hired, we care about diversity,” she said. “We are building products for people who have traditionally been underutilized by major banks. I think in order to be in sync with our mission, we must incorporate this into our team building. Our execution Over 50% of the U.S. is women. The entire Risk team is female. We are diverse in terms of gender, age and ethnicity because we want to truly understand our customers and create a product that is inclusive.”

Brian Dixon, partner at Kapoor Capital, explains that there There are approximately 45 million people in the US who must have a credit score but cannot get a loan, get a credit card, or apply for a mortgage. And that number is only increasing.

“When we learned that Christie first experienced these issues when she moved to the United States and thoughtfully figured out a way to circumvent the predatory and broken credit card system, it boosted our confidence in her and the product itself. Deepened,” he wrote via email.

Dixon believes that TomoCredit’s model of not charging the user it “What’s in the market “Safe and Affordable Alternatives”.

“Their mission aligns with our thesis of closing the gaps in access and opportunity in the credit space at large,” he said.

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