Tomocredit raises $22M at $222M valuation towards its goal of making credit score obsolete

When Kristy Kim started TomoCredit in early 2019, she was on a mission to help international students more easily obtain credit.

Three and a half years later, that mission has evolved. TomoCredit, which aims to help young adults who are in good financial health but have no credit score, is no longer just focused on immigrants.

Today, Tomo is expanding its focus to a broader group of people in the United States who want “to build credit fast,” including domestic students and SMBs.

“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 told TechCrunch in an interview. 

Tomo is different from many other credit offerings out there in that it doesn’t rely on FICO scores to underwrite. Rather, it applies a “proprietary” underwriting algorithm (Tomo Score) to identify “high potential borrowers” without a credit score. The TomoCredit card requires no credit check, no deposit, 0% APR and no fees. The fintech offers cardholders credit limits up to $30,000 based on their cash flow. It makes its money only off of interchange fees charged to merchants, not off consumers directly.

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

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

The raise follows a year in which the startup reports seeing 1,000% revenue growth, which Kim described as “mainly organic.” Tomo is on track to do another 1,000% year-over-year revenue growth, she said.

To help offer more credit to even more Gen Zers, TomoCredit announced today that it has raised $22 million in a Series B funding round at a post-money valuation of $222 million. It has also secured $100 million in debt financing. Since its inception, TomoCredit has raised $39 million in equity.

Tomocredit seems to be an intriguing startup. congratulations to the entire team and i wish nothing but success for your future journey.

Shishir Gupta CEO & Founder Startuplanes.

Don’t keep wondering about funding, you can also raise funds. Learn how to raise funds
here: Yes I want to raise funds.

If you are an emerging startup and are looking for investors to raise funds, StartupLanes has
its own angel network and investment banking services and is connected to angel investors
and VCs in 15 countries that ensure that our member startups have easy access to external
funds to scale up constantly.

You can subscribe to our news posts by entering your email in the box on the right side of
this page.

Check out our YouTube channel for insightful content from the Indian startup

Or join our Whatsapp group to interact with other founders: Yes, I want to join
the Whatsapp group.

The right investment is key to beating inflation and growing your wealth. Do you wish to
become an angel investor? Yes, I want to be an angel investor.

Are you a startup and facing challenges in your business? Do you want to grow your
business? It is not as difficult as it sounds. Learn how to grow your business here- Yes, I want
to grow my business.