Tongo—a FinTech company realigning income and expenses for the commission economy—announced it has raised $7 million in seed funding. The company will use these proceeds to expand product and team in its initial market of real estate, where Tongo empowers brokerages to offer agents on-demand access to pending commissions, which they can use like a line of credit to grow their business & stabilize cash ﬂows. The round was led by MetaProp, with participation from New Valley Ventures, Good Friends, Launchpad, Elizabeth Street, Red Bike, Lab Ventures and Entrepreneur’s Roundtable Accelerator. Tongo’s fundraising to-date is $11 million.
“Traditional credit products are not built for today’s commission economy. Their underwriting models prioritize steady, salaried incomes that work well with their monthly billing cycles. The combination of lower credit availability and strict monthly repayment generates an immense problem for tens of millions of self-employed people where income is more free ﬂowing, such as in real estate and other commission-driven professions. It presents a huge opportunity for Tongo to create ﬁnancial products that realign income and expenses,” said Tongo’s CEO Brandon Wright. “By effectively building a debit card for future income, Tongo gives agents an alternative to the credit ecosystem that reduces the volatile, cyclical nature of their income, and at the same time gives them a cost-effective source of capital to grow their business.”
Tongo partners with real estate brokerages to offer their agents ﬂexible, real-time and low-cost access to future commission income long before closing via a card-based product. The Tongo Smart Card can be utilized wherever debit cards are taken, and funds can be pushed directly into one’s checking account. Once a commission is received, the borrower simply pays down the balance on their card. If a contract falls through, Tongo provides the borrower with the ﬂexibility to pay down the balance the next time a commission is received. Tongo only gets repaid when an agent collects — whenever that happens next. Brokers no longer have to advance money to agents.
“The lumpy, irregular and uncertain nature of commission revenue defines the income patterns of many of the 3 million licensed real estate agents in the U.S., complicating their ability to invest in their businesses and manage personal expenses,” stated MetaProp’s General Partner Zak Schwarzman. “Tongo has developed a modern, elegant solution that eases this challenge, enabling agents to easily access future commission revenue on friendly, ﬂexible terms with the swipe of a card. Tongo addresses a glaring gap in the consumer credit market for agents and is resonating equally strongly with brokerage ﬁrms, who are partnering with Tongo to offer a powerful and differentiated ﬁnancial management solution that impacts their agents’ lives and wallets.”