TO

TomoCredit Financial Model

• Credit card issued on Mastercard network, no credit score check required.
• 0% APR, no hidden fees.
• Helps users build a credit score, enabling downstream access to mortgages and car loans.
• Revenue model is merchant-paid interchange; cardholders pay nothing.
• Referral program with 1% active cashback incentive.

Credit-score pyramid (Source: CFPB):

• High credit score (800+): 50M people
• Mid credit score (650–800): 80M people
• Low credit score (0–650): 120M people
• No credit score: 30M people - labeled "Hidden Prime"; target segment

Market segmentation:

• Students (international & domestic): 20M
• Immigrant workers (proven financial responsibility): 27M
• First-time cardholders: 170M

Gen Z awareness gap: 76% of college students do not know their credit score.

No explicit TAM/SAM/SOM dollar figures in deck.

• Interchange revenue: paid by merchants on every transaction; not charged to cardholders.
• Typical Mastercard credit interchange: ~1.5–2.0% of transaction value.
• No annual fee, no APR charges (0% APR product).
• Cashback referral at 1% - this is a cost item (funded from interchange spread).
• Monthly spend per active user: $1,000.
• Implied monthly interchange per active user at 1.5%: ~$15.

• Transaction volume and active spenders grew 15x in the 6 months from Aug 2020 to Jan 2021.
• Chart shows near-zero activity Aug–Sep 2020, inflection at Oct 2020, steep growth through Jan 2021.
• Monthly spend per user: $1,000.

• CAC: $2.
• LTV: described as "High LTV users" - no dollar figure given.
• Monthly spend per active user: $1,000.
• Implied monthly interchange revenue per user: ~$15 at 1.5%.
• Implied CAC payback: ~0.1 months at $2 CAC / $15 monthly revenue per user.
• No churn rate, no LTV figure, no credit loss / default rate disclosed.

Competitive positioning: scatter plot on axes of Income (Low→High) vs. Credit Requirement (None→Required):

• Tomo: high-income / no credit requirement quadrant - unique position.
• Chime: low-income / no credit requirement.
• Discover, Capital One: mid-income / credit required.
• Amex, Chase: high-income / credit required.

Moat claims:

• Alternative underwriting (no credit score check) - specific methodology not disclosed.
• Brand / community ("tomorangers") and referral flywheel.
• First-mover in high-income, no-credit-check card segment per their own positioning.

• Founder is a former international student at UC Berkeley; contact: kristy@tomocredit.com.
• Headcount projections (from projections table): 10 (2020) → 50 (2021) → 500 (2022).

• Archetype + why: Consumer fintech credit card - interchange-revenue P&L model. Revenue is purely GMV × interchange rate; no loan book, no interest income (0% APR). Closest archetype is a DTC/fintech card model: cardholders × monthly spend × net interchange rate = revenue. A full 3-statement is appropriate to size headcount cost ramp and burn.

• Forecast horizon & granularity: Monthly for Years 1–2 (2021–2022), quarterly for Year 3 (2023). Deck projections cover 2020–2022 - extend to 2023 for a 3-year forward view.

• Key drivers & assumptions:
• Active cardholders (start of period) -
• Monthly new cardholder adds -
• Cardholder churn rate (monthly) -
• Monthly spend per active cardholder: $1,000
• Gross interchange rate:
• Network / processing cost rate:
• Cashback / referral cost rate: 1% on referred users;
• Net interchange margin:
• CAC: $2
• Headcount: 10 / 50 / 500 for 2020 / 2021 / 2022
• Average fully-loaded salary per head:
• Credit loss / charge-off rate:
• Marketing spend (non-referral):

• Scenarios (Base / Bull / Bear - which variables flex):
• Base: Monthly adds grow linearly per GTM plan; $1,000/user spend holds; net interchange ~0.9%.
• Bull: Viral referral loop accelerates adds 2×; spend per user lifts to $1,500 as user quality improves; faster path to profitability.
• Bear: CAC creep (TikTok / paid channels scale poorly), churn 5%+, spend per user drops to $700 as lower-income cohorts enter; net interchange compressed by cashback.

• Required sheets / outputs:

1. Assumptions - all drivers above with scenario toggle (Base / Bull / Bear)
2. Cardholder Cohort Model - monthly new adds, churn, active card count by cohort
3. GMV & Revenue - active cards × spend × net interchange rate
4. P&L - Revenue, processing costs, cashback, gross profit, opex (headcount, marketing, tech), EBITDA
5. Headcount Plan - departmental build matching deck ramp (10→50→500)
6. Cash & Runway - burn rate, cash balance, months of runway (requires funding amount as input)
7. Dashboard - KPI summary: active cards, GMV, revenue, CAC, net margin, runway