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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.

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