Credit card issuers are traditionally rather selective when it comes to who they grant lines of credit, and that choosiness inevitably ends up excluding some groups of people from accessing the credit they need to procure a home or automobile. Two such demographics that have long been excluded as risky investments are immigrants and younger purchasers, who tend not to have the credit history required by credit companies.
To a company like TomoCredit, that problem area is easily turned into a major opportunity. Having already issued cards to more than 40 million credit-invisible individuals shut out of traditional credit lines, the company is now prepared to double down on its mission thanks to a $139 million Series B fundraise led by Mastercard and Morgan Stanley.
The reason for the capital raise is twofold, according to Founder and Chief Executive Officer Kristy Kim. “First, we were seeing incredible organic demands in the past two years, and we wanted to hire top talent to keep up with that organic growth. Secondly, we want to take full advantage of the newest consumer trends of avoiding high APR products.” Indeed, with TomoCredit offerings charging no fees and 0% APR, compared to 25% or higher standard rates from traditional lenders, the appeal of Kim’s company is more than apparent.
