Housing startup founded by former Zillow execs expands in Texas

real estate tech

A new digital platform for home purchases and mortgages has expanded in the Lone Star Stat. Photo via Getty Images

Tomo Networks, a fintech startup that operates a digital platform for home purchases and mortgages, has expanded its offerings statewide after launching in the summer of 2021 in Houston and Dallas.

Founded in October 2020 by former Zillow Group executives Greg Schwartz and Carey Armstrong, Tomo launched over the summer with a $70 million seed funding round led by Ribbit Capital. DST Global, NFX, SVB Capital, and Zigg Capital participated in the seed round.

“Tomo’s cutting-edge platform is unlike anything else available to homebuyers,” Nick Huber, a partner at Ribbit Capital, says in a news release. “The real estate market has not been skewed toward the buyer in quite some time, and we saw a huge opportunity to get behind a company that will do just that.”

A recent analysis of the Houston home market by Skylar Olsen, principal economist at Tomo, shows Bayou City remains among the most affordable U.S. markets and continues to provide homeownership opportunities.

According to the Tomo analysis, the gap in Houston between millennials’ share of the population and their share of total housing value has improved, shrinking from 9.7 percentage points to 9 percentage points in 20 years. “Millennials make up the largest generation of Houston’s total population,” the analysis says.

In November, the median price of a home in the Houston area rose 16.3 percent to tie the record high of $314,000 set in June, the Houston Association of Realtors says.

Tomo, based in Stamford, Connecticut, bills itself as “the first platform in the real estate space that is specifically focused on the buyer experience.” The company believes its digitally oriented approach holds strong appeal for millennials and other young homebuyers.

Tomo guarantees an on-time closing and a price match, meaning that if you find a better deal, the company will match it. Tomo says it cuts the time for mortgage preapproval by as much as 55 percent.

The company initially launched in Houston and Dallas as well as Seattle. Aside from its headquarters in Connecticut, Tomo maintains offices in Austin and Seattle. In Dallas, the startup recently rolled its first-ever ad campaign.

“In today’s housing market, buying is not an enjoyable experience; it has become competitive, stressful, and confusing, and too many people are coming away from it empty-handed. As single-family homes become commoditized by investors, the American dream is moving further and further out of reach. We are going to change that,” says Schwartz, CEO of Tomo.

A Houston real estate expert has launched a new resource for first-time homebuyers as rates of house sales soars. Getty Images

Houston-area online resource launches to help new homebuyers purchase a home

Rentsucks

Between the expiration of a federal evictions moratorium and the coronavirus crisis, the housing market in Houston has launched into uncharted territory — jumping in June after two straight months of decline.

Houstonian and broker-and-owner of RE/MAX Top Realty, Freddy Rodriguez, launched an online resource and consulting website called Rentsucks.com to demystify the home buying process for first-time buyers who perhaps are not sure of where to start. The online resource educates and guides new buyers into a plan that works for them.

"I've been on both sides of the homebuying transaction with my experience in the mortgage industry and as a real estate agent," says Rodriguez. "I want to be a trusted resource for people who have dreams of owning their own home and need guidance and advice."

Potential buyers can use the tool to assess their options with the help of experts provided by the online consulting service. Renksucks.com touts a free no-obligation consultation that matches them with a loan officer and a local realtor, guiding them through the process from start to finish.

Rodriguez says that his inspiration for the project ignited after seeing the instability of the last few months as Houstonians struggle financially to make ends meet and pay rent.

"I saw how tough the situation is for some people, losing their jobs and not being able to pay their rent," says Rodriguez. "When I heard that I thought, 'rent sucks,' if someone has ownership of a home, they could use their equity to refinance and pull out some cash in case they need it but when you're renting you can't do that."

According to Rodriguez, most first-time buyers think you need to 20 percent downpayment to buy a home, but that's not always the case, with many first-time homebuyers eligible to pay just 3 percent of downpayment.

"I want to be able to provide brand new buyers with help on financial issues," says Rodriguez. "I want to be able to provide them with the best experts and connections using our network to link them with a realtor in their local market that has a proven track record of looking out for the best interest of buyers."

To start the process, potential buyers can apply online through the website where they will be matched with local homebuying experts with the goal to guide them into the best way of achieving their dream of a home purchase.

Rentsucks.com will also help them save money and cut down on closing costs, through a credit from the lender and a closing contribution from the realtor.

"Everyone needs a roof over their head," says Rodriguez. "While you can't change your financial situation drastically, you can build credit and make a plan to get where you want to be in a few years. Rentsucks.com is going to save you a lot of time by providing you correct information and advice, even if the best deal is with another lender or realtor."

For better or for worse, COVID-19 has increased the need for technology in real estate. Getty Images

Houston expert: How COVID-19 fast-tracked real estate technology

Guest column

COVID-19 has impacted every facet of our lives, and the housing market is no exception. The majority of real estate, for better or worse, relies on in-person interactions.

Things like wet signatures, home tours, inspections, and appraisals all require physical attendance — making it difficult to create digital alternatives.

Although many of these disruptions are a hindrance this unique time also presents an opportunity for the real estate industry to showcase its ability to grow and adapt to the digital age.

Technology's grand entrance into real estate

As a people-first business, real estate has always been based on relationships and face to face interactions which make transactions amid a pandemic excruciatingly difficult. Although technology and real estate are not completely foreign with companies such as Zillow and OpenDoor having established their niche, many of the more traditional real estate companies had yet to fully embrace the reality of technology's arrival. The thought was a real estate transaction must be sealed with a handshake, a wet signature, and a bottle of champagne.

Upon the onset of COVID-19, many quickly realized that technology was no longer an option but in order to endure this crisis adoption of disruptive innovations was a necessity. Moreover, with millennial homebuyers being the most active clientele the industry needed to meet them where they are — online.

Although there is nothing like the personal touch of a guided tour, home showings had to adjust to adapt to COVID-19 by embracing and utilizing 21st century technology. This was achieved through videos, high quality images, and innovative staging posted online for potential buyers to take 360-degree tours. Rather than sacrificing nuances such as a well-staged home, which has shown to have the potential to increase a home's sale price by up to 6 percent, real estate agents crafted innovative ways to digitally put a home's possibilities on display for buyers to see.

Another impediment created by COVID-19 was the way people close. Many documents require wet signatures. Fortunately, remote closing technology has improved over the last decade and COVID-19 increased the adoption rate of these platforms by individual states and lending institutions at a much quicker rate than would have been otherwise.

Some examples of these useful tools are remote online notarizations (RONS), mobile closings, and electronic signatures. While these tools are extremely helpful there is still much in the way of mass adoption before the industry can be as nimble and adaptive to not experience large stalls in the face of this sort of unprecedented pandemic. In time, as we dive deeper into the digital age, it would seem that these options would become more widely accepted throughout the industry.

The dangers of tech and real estate

As new digital adaptations increase, so do the risks. Although the introduction of new technology has enabled the industry to continue operating, it also increases the already prevalent risk of cyber security threats.

Phishing attempts and cyber-attacks are on the rise. Hackers are trying to capitalize on increased exposure from employees connecting on home devices. Simply educating employees and clients of the dangers associated is the first line of defense. Internally and throughout the industry, we have seen companies who are committed to ensuring each transaction is done safely and securely through VPNs, and other programs that guarantee the protected transfer of funds.

As a company, we have made cyber security a top priority by requiring multi-factor authentications, third party wire verification services through a company named CertifID and implementing consistent training on how to spot malicious phishing attempts.

What's next for the Houston housing market?

Consumer confidence is key to the success of the housing market. As Houston's economy begins to reopen, we have seen a substantial increase in transactions being finalized and consummated through closings. Both refinances and purchase transactions are on the uptick at the moment and that is encouraging. However, as new waves of the virus roll in there is always the chance that business slows, and the idea of buying a house fades.

As we wait for consumer behaviors to stabilize to the new normal, savvy buyers and borrowers have the opportunity to capitalize on a unique opportunity by taking advantage of low mortgage rates for increased buying power or to lower payments on existing mortgages. Transactions beget transactions and the more movement there is the better for the industry.

Lastly, as with all disruption comes opportunity and opportunity abounds because of COVID-19. With so many companies being forced to adopt new ways of operating due to the pandemic the real estate industry has a chance to adopt a more advanced foundation based on available technology which will help insulate it from future disruptions. With some innovation, a simpler, more efficient overall experience can be created for customers.

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Eric Fontanot is president of Patten Title a full-service closing company with locations in Houston, Austin, and Dallas. Patten Title's technology-enabled team of title and escrow professionals continue to provide real title solutions for customers in Texas.

SquareFoot — a real estate tech company with Houston roots — is entering the Houston market. Getty Images

Real estate tech company founded by Houstonian launches locally, looks for office space

Homecoming

A New York-based company that uses technology to optimize the commercial real estate leasing process is expanding into Houston — and it's a bit of a homecoming for the company's CEO.

SquareFoot, which was founded by Houston native Jonathan Wasserstrum in 2011, has launched in Houston following the closing of a $16 million series B funding round led by Chicago-based DRW VC. The company uses tech tools — like a space calculator and online listings to help users find the right office space quicker and easier than traditional methods.

The Bayou City's growth in small businesses and startups makes for a great market for SquareFoot.

"Houston, in addition to being a leading market for business, is a city in transition," Wasserstrum says. "We've witnessed a growing trend of smaller companies cropping up, with startups showing that they're here to stay. I want SquareFoot to be a major part of the city's growth and evolution."

The idea for a company, Wasserstrum says, came from a friend in Houston who was struggling to find office space for his small company. Years later, that problem's solution would be SquareFoot.

SquareFoot's Houston operations are up and running online, and the listings and resources will continue to grow. Wasserstrum says the team will also open a physical office in Houston, and the team is currently looking for its own office space in a "highly-desirable" area, Wasserstrum says.

"That will not only make it easier for us to show office spaces to prospective clients, but it also sends the message that we understand these clients better than anyone," he explains. "Where you choose to open your offices is part of the story you're shaping for candidates and clients."

In regards to Houston-based employees, Wasserstrum says he will start with tapping a few Houston real estate experts. He will take the business model that was successful in New York and adapt it for Houston

"It's not only the East and West Coasts where innovation is taking place," Wasserstrum says. "We want to help Houston continue to grow as a stellar place to launch and grow a company."

National expansion is Wasserstrum's big goal, he says, and after settling in Houston, he plans to next enter into Washington, D.C., and a few other major markets.

Wasserstrum explains what the Houston expansion means to him, how tech is changing real estate, and trends he's keeping an eye on.

IM: What does it mean to be expanding in your hometown?

Jonathan Wasserstrum: Houston is where I grew up. My whole life has been shaped by what I saw and learned in Houston. I moved away for college, and have built my career on the East Coast, but Houston will always be a big part of me. My parents still live there so I have good reasons to fly home and to come home again.

As I've built out my company, SquareFoot, since 2012 at our NYC headquarters, I have dreamed of being able to expand our services nationally. We have helped over 1,200 companies find and secure office spaces in major cities. As our executive team considered where to invest in and to expand to next, Houston emerged at the top of the list. We made this decision for professional growth reasons, but that choice has an emotional element for me as well.

Going forward, I should have additional good reasons to fly home and to see my parents more often than I have had the occasion to over recent years. Plus, we save on hotel costs!

IM: What makes Houston a great place to expand into?

JW: From an office space perspective, Houston is an under tapped market. There are countless companies looking for the services we provide, but nobody has yet figured out how to build a company to serve them specifically.

We acquire many of our clients through online search — people looking for office space are literally searching online for solutions. We've seen in recent months and years a surge in searches from Houston, which indicated to us that there was a gap that had developed there. We've long had a digital presence there, thanks to these searches, but now we're increasing our physical presence on the ground. We'll hire a broker and put an office there in the coming months.

IM: What sort of trends are you seeing in office real estate? Are these trends happening in Houston already?

JW: Over the past years, we've seen a sharp increase in demand for flexible solutions. Traditional coworking spaces have worked out for many companies, but it's not for everyone.

At the same time, the long-term leases that are usually required upon signing on for an office space of your own has largely kept growing companies out of the market; it has scared them off. We realized there had to be a middle option so we launched FLEX by SquareFoot last year. Now, for the first time, all companies can find the spaces they want with the terms they want.

We are excited to introduce FLEX to the Houston market and to show companies there that there's more lease flexibility and opportunity available than they might think. Change in commercial real estate happens slowly over a long period of time. Houston has the chance now to be a part of their changing wave.

IM: How is technology changing the industry?

JW: For many decades, commercial real estate operated the exact same way. And it intended to stay that way because nobody had reason to believe anything was broken or wrong. However, there were several inefficiencies that clients just had to deal with because that was the industry standard.

The first one was the lack of transparency of which office spaces were unoccupied or what they'd cost. Brokers would lock up this information and keep clients at a distance, unless they were willing to sign on to work with them. With SquareFoot's online listings platform, we have unlocked that information, have educated countless people, and have made for a more seamless and enjoyable process for our clients as partners in their searches.

The other technological breakthrough we've made is in our mobile app. Still, in 2020, too many clients are taking tours of these offices with pen and paper and occasionally snapping a photo or video to send back to their stakeholders. Our app solved those issues once and for all, enabling better communication back and forth and a better user experience for all. Regardless of which team member goes on the office tour with our broker, everyone is clued in and on the same page.

We want everyone on the greater team to buy into the vision, and to recognize the potential, not just one representative who happened to be on the office tour one afternoon.

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3 Houston innovators to know this week

Editor's note: In this week's roundup of Houston innovators to know, I'm introducing you to three local innovators across industries — from space tech to software development — recently making headlines in Houston innovation.


Michael Suffredini, CEO and president of Axiom Space

Axiom's CEO announced a new mission and space suit design. Photo courtesy of Axiom Space

It was a big news week for Axiom Space. The Houston company announced its next commercial space mission with NASA to the International Space Station a day before it unveiled its newly design space suit that will be donned by the astronauts headed to the moon.

“We’re carrying on NASA’s legacy by designing an advanced spacesuit that will allow astronauts to operate safely and effectively on the Moon,” says Micahel Suffredini, CEO of Axiom, in a statement. “Axiom Space’s Artemis III spacesuit will be ready to meet the complex challenges of the lunar south pole and help grow our understanding of the Moon in order to enable a long-term presence there.”

Called the Axiom Extravehicular Mobility Unit, or AxEMU, the prototype was revealed at Space Center Houston’s Moon 2 Mars Festival on March 15. According to Axiom, a full fleet of training spacesuits will be delivered to NASA by late this summer. Read more.

Julie King, president of NB Realty Partners

Houston's access to lab space continues to be a challenge for biotech companies. Photo via Getty Images

In terms of Houston developing as an attractive hub for biotech companies, Julie King says the city still has one major obstacle: Available lab space.

She writes in a guest column for InnovationMap that biotech startups need specialized space that can hold the right equipment. That's not cheap, and it's usually a challenge for newer companies to incur that cost.

"However, with realistic expectations about these challenges, the good news is that once settled into a facility that is a fit, Houston’s emerging biotech companies can thrive and grow," she writes. Read more.

Owen Goode, executive vice president at Zaelot

Houston software development firm Axon is planning its Texas expansion thanks to its recent acquisition. Photo via LinkedIn

Owen Goode is a huge fan of Houston. That's why when his software design firm, Axon, got acquired by Zaelot, led by CEO Jeff Lombard, in January, he made sure the deal would mean growth in the region.

Zaelot is a global, software firm with a presence in 14 countries, mostly focused in the United States, Uruguay, and Iceland. With the acquisition of Axon, the combined company is poised to expand in Texas, beginning in Houston, Goode says.

“Together we have a strong suite of offerings across a wide variety of domains including full-stack development, cloud/data engineering, design, staff augmentation, project management, and software architecture. We also have experience in multiple domains, including health care, aviation, defense, finance, and startups,” says Goode. Read more.

Following Silicon Valley Bank collapse, banking diversification is key for Houston founders

SVB shake up

Last week, Houston founder Emily Cisek was in between meetings with customers and potential investors in Austin while she was in town for SXSW. She was aware of the uncertainty with Silicon Valley Bank, but the significance of what was happening didn't hit her until she got into an Uber on Friday only to find that her payment was declined.

“Being positive in nature as I am, and with the close relationship that I have with SVB and how they’ve truly been a partner, I just thought, ‘OK, they’re going to figure it out. I trust in them,'” Cisek says.

Like many startup founders, Cisek, the CEO of The Postage, a Houston-based tech platform that enables digital legacy planning tools, is a Silicon Valley Bank customer. Within a few hours, she rallied her board and team to figure out what they needed to do, including making plans for payroll. She juggled all this while attending her meetings and SXSW events — which, coincidentally, were mostly related to the banking and fintech industries.

Sandy Guitar had a similar weekend of uncertainty. As managing director of HX Venture Fund, a fund of funds that deploys capital to venture capital firms around the country and connects them to the Houston innovation ecosystem, her first concern was to evaluate the effect on HXVF's network. In this case, that meant the fund's limited partners, its portfolio of venture firms, and, by extension, the firms' portfolios of startup companies.

“We ultimately had no financial impact on venture fund 1 or 2 or on any of our portfolio funds or our underlying companies,” Guitar tells InnovationMap. “But that is thanks to the Sunday night decision to ensure all deposits.”

On Sunday afternoon, the Federal Deposit Insurance Corp. took control of SVB and announced that all accounts would be fully insured, not just up to the $250,000 cap. Customers like Cisek had access to their accounts on Monday.

“In the shorter term, the great news is SVB entity seems to be largely up and functioning in a business as usual manner,” Guitar says. “And they have a new leadership team, but their existing systems and predominantly the existing employee base is working well. And what we're hearing is that business as usual is taking place.”

Time to diversify

In light of the ordeal, Guitar says Houston founders and funders can take away a key lesson learned: The importance of bank diversification.

“We didn't think we needed one last week, but this week we know we need a resilience plan," she says, explaining that bank diversification is going to be added to "the operational due diligence playbook."

"We need to encourage our portfolio funds to maintain at least two banking relationships and make sure they're diversifying their cash exposure," she says.

A valued entity

Guitar says SVB is an integral part of the innovation ecosystem, and she believes it will continue on to be, but factoring in the importance of resilience and diversification.

"Silicon Valley Bank and the function that they have historically provided is is vital to the venture ecosystem," she says. "We do have confidence that either SVB, as it is currently structured or in a new structure to come, will continue to provide this kind of function for founders."

Cisek, who hasn't moved any of her company's money out of SVB, has similar sentiments about the importance of the bank for startups. She says she's grateful to the local Houston and Austin teams for opening doors, making connections, and taking chances for her that other banks don't do.

"I credit them to really being partners with startups — down to the relationships they connect you with," she says. "Some of my best friends who are founders came from introductions from SVB. I've seen them take risks that other banks won't do."

With plans to raise funding this yea, Cisek says she's already started her research on how to diversify her banking situation and is looking into programs that will help her do that.

Staying aware

Guitar's last piece of advice is to remain confident in the system, while staying tuned into what's happening across the spectrum.

“This situation that is central to the venture ecosystem is an evolving one," she says. "We all need to keep calm and confident in business as usual in the short term while keeping an eye to the medium term so that we know what happens next with this important bank and with other associated banks in the in our industry."

Meet the Texas security experts building a framework for safer schools

For the Kids

For a large portion of his career, Mike Matranga worked as a Secret Service agent protecting the President and First Family all over the world.

He then moved to the Department of the Interior, specializing in domestic terrorism, when the 2018 shooting at Marjory Stoneman Douglas High School occurred. Only three months later, another school shooting happened in Santa Fe, Texas.

That's when Matranga received a phone call from a Texas superintendent, asking him to take his decades of security experience and training and develop a proactive school safety program — something that didn't yet exist. That comprehensive, holistic plan would go on to be ranked No. 1 in Texas and No. 5 in the nation.M6

Mike Matranga, M6 GlobalM6 Global's Mike Matranga.Photo courtesy of M6 Global

This led Matranga to found M6 Global, which today specializes not only in school safety plans but also programs for industrial and corporate settings and even major sporting events.

The team is comprised of current and former federal agents and security specialists, a psychiatrist, a leading emotional intelligence doctor, a former White House doctor, and emergency management experts. Together, they have more than 100 years combined experience in school safety, law enforcement, and national and global security.

And that's what's made Matranga's initiatives so successful: the people.

“Of all the measures and initiatives we implemented, the absolute most important thing we have are people who have the ability to make real change — which no camera system will provide," he says. "Simply teaching people how to identify pre-attack behavior, self-harm behavior, and a person in crisis will always be what is most important. Secondly, having the resources and courage to intervene once those things are identified will keep individuals off the path to violence. We must never discredit the human element.”

M6 Global also partners with ASAP Security Services in Houston to provide the most up-to-date technology and products, with everything from facial recognition software to cameras to threat detection software. It makes their services fully turn-key, and as Matranga says, "two brains are better than one."

Mike Matranga and President Joe Biden, M6 GlobalMike Matranga (left) with President Joe Biden.Photo courtesy of M6 Global

"At some point we have to realize that the law enforcement response that we adopted in the '80s is not working," he adds. "And it’s not just police — it’s the patterns and behaviors of people that will tell you there is a problem, so we need to shift from a reactive to a proactive mindset. We need to have actionable resources in place and a society that's better informed to recognize the signs before someone becomes a person in crisis."

To learn more about M6 Global and explore its services, visit here.

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