Former Zillow execs raise $40M seed round for Tomo Networks to reinvent how people buy homes

Former Zillow executives Carey Armstrong (left) and Greg Schwartz are co-founders of Tomo, a new fintech startup in the real estate industry. (Tomo Photos)

Two former top Zillow Group leaders are getting back in the real estate industry with new startup that aims to change the way Americans buy homes.

Greg Schwartz and Carey Armstrong just unveiled their new company, Tomo Networks, which announced a massive $40 million seed round this week.

Founded just a few months ago, Tomo’s first product is a tech-fueled mortgage and transaction platform targeted at both real estate agents and consumers. The company describes itself as a fintech startup. It is staying quiet about the exact business model, but it has big ambitions.

“Mortgage is a massive, distributed, important market,” said Schwartz, the CEO. “And we’re going to lead it.”

The seed investment and pedigree of the investor group — Trulia co-founder Pete Flint; ex-Zillow CEO Spencer Rascoff; and others are among the backers — is a vote of confidence in both the idea and also the founding team.

Schwartz spent 13 years at Zillow, helping the Seattle company grow into a real estate database behemoth. He held titles including vice president of sales, chief revenue officer, chief business officer, and most recently president of Media & Marketplace when he left in January.

Armstrong joined Zillow in 2013 and also held multiple leadership roles, including director of product management, head of corporate development, and vice president of the company’s nearly $1 billion Premier Agent business. She previously worked at Boston Consulting Group and Forrester.

Schwartz left Zillow on good terms and planned to take a year off from work, spending time with family and rediscovering the ski slopes. But then the pandemic hit.

He started thinking about his next move. Schwartz was proud of what he and his colleagues accomplished at Zillow, but “there was unfinished business for me and my friends in making the real estate transaction fundamentally more comfortable,” he said in an interview with GeekWire.

Greg Schwartz, left, with Rich Barton at Zillow’s Premier Agent Forum in 2017. (GeekWire Photo / Kevin Lisota)

Schwartz’s family had also just gone through the home-buying process.

“Finding a house was awesome,” he said. “But making an offer, buying it, moving into it, and then renovating it was pretty painful and demoralizing. I had a wonderful real estate agent. It was the core systems and the technology that left me feeling like I had no power and no transparency. I had no ability to actually impact the outcome.”

Tomo’s mission is to take the complexity in a real estate transaction and make it invisible to the homebuyer. The company is starting with a digital mortgage product that focuses on data, automation, and third party API integrations. In some ways, Tomo wants to be the PayPal for the mortgage industry.

“We’re going to move from a document management approach to data management approach,” Schwartz said.

He added: “People shouldn’t dread the transaction. They should dream about the home, and it’s our job to make them feel that way.”

Asked why he didn’t just build out real estate ideas under the Zillow umbrella, Schwartz said he and his colleagues are driven by a “different insight.”

“We think that there’s going to be an incredible set of value created by marrying automation with people-driven advocacy,” he said. “And we think there’s some real innovation to drive by providing an e-commerce-like platform with real estate agents and loan officers and consumers directly, in a tightly-coupled solution.”

Zillow is investing heavily in its home-buying platform Zillow Offers, which competes with others including Opendoor. They differ in that Zillow Offers and Opendoor are more focused on the home-seller, whereas Tomo is trying to help the home-buyer.

Schwartz, a former director at Yahoo and vice president at CNN, said he also just dreamed of being a founder.

“I wanted to have that iconic experience in my career,” he said.

When Schwartz announced his departure at Zillow, co-founder and CEO Rich Barton credited Schwartz with building Zillow’s original sales and revenue organizations.

“We had all this traffic, but we hadn’t figured out how to monetize it,” Barton said at the time. “Greg led the creation of every iteration of our business model.”

The name “Tomo” comes from the Japanese philosophy of “omotenashi,” which is all about providing ultimate hospitality and anticipating the needs of a guest.

“We’re going to anticipate customer needs in the real estate process,” Schwartz said.

Tomo is co-headquartered in Seattle and Stamford, Conn., where Schwartz is now based. The company, which employs about 20 people, also has an office in Austin, Tex.

The seed round was led by Ribbit Capital, Zigg Capital, and NFX, a firm co-founded by Flint, who sold Trulia to Zillow for $2.5 billion in 2015. SVB Capital, Alex Sacerdote, Kurt Mobley & Eli Weinberg, and Ted Ackerley also invested.

“I have known this team for more than a decade and they will deliver on the movement my team and I drove when we founded Trulia, to delight customers with transformational digital experiences related to the real estate transaction,” Flint said in a statement.

Rascoff, an investor in Tomo, recently helped launch a new real estate startup called Pacaso. His co-founder is Austin Allison, another former Zillow executive.

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