Although he was finding success with Payfully, a cash advance platform for AirBnB hosts, Luis Scull was worried. While his startup was promising, it had one massive structural risk - it depended on a single platform (AirBnB) for 100% of its demand generation. This, coupled with challenges of fundraising amidst a strategic shift, led him to think about an even larger unaddressed problem in the real estate market. Recognizing the cash flow management challenges that independent realtors and commercial brokers faced, Luis and his team saw the potential to replicate Payfully's early success with commission advances. Real estate commission advances were not a new product however, and they quickly understood that merely replicating this model wouldn't suffice; instead, a more ambitious, innovative approach was required.
Luis cut his teeth in financial services in New York City, where he started analyzing emerging technology companies for Amerindo Investment Advisors. He then joined Open Field Capital, becoming their first employee, and over a decade helped to grow their assets under management to $300 million. In 2016, he and co-founder Alberto Sheinfeld launched Payfully, inspired by the potential to provide Airbnb hosts with a unique way to monetize the revenue from their future bookings.
Brandon Wright first crossed paths with Luis in 2017 at the New York startup accelerator ERA, while still working for the payments company he co-founded Katapult (NASDAQ: KPLT). Brandon's rich entrepreneurial journey began when he established a retail coffee shop in Seattle, after which he started a residential mortgage brokerage before co-founding Katapult, His extensive experience in alternative lending, accumulated through Katapult's rise to become the leading non-prime Buy Now Pay Later platform for omnichannel retail, have proven invaluable to Tongo as they began working to build a comprehensive financial platform for the commission economy.
Luis and Brandon reconnected in 2020 and began working together full time on Tongo. They joined forces with John Macris, a risk officer boasting over two decades of retail banking experience, and Patrick Waltzinger, a seasoned entrepreneur with multiple security startups under his belt. Tongo's mission, similar to Payfully, is to help independent contractors better align their income and expenses, but this time for real estate agents instead of AirBnB hosts. Their initial product is a debit card offering real time cash advances linked to their pipeline of commissionable transactions under contract.
Guided by a mission to transform the way real estate professionals handle their finances, the Tongo team set off on a promising note. They successfully drew the interest of Douglas Elliman, who stepped up not only as a distribution partner but also as an early investor. Since raising their series Seed in 2022, Tongo has secured several more agreements with large brokerages,and was recently selected for the NAR REACH scale-up program.
In their respective roles at Tongo, Luis the financial executive as CFO and Brandon the operator as CEO, have established a powerful leadership dynamic. Tigre Wenrich, CEO of LAB Ventures, notes, "We first encountered Luis while he was at Payfully and found his concept intriguing, albeit a bit early for us to invest. Upon meeting Brandon at Blueprint 2021, we realized they were building a formidable team. We facilitated their introduction to Douglas Elliman, which led to a brokerage-wide agreement and a collective investment into Tongo's Seed round."
Since securing that initial investment, Tongo has been on a steadfast growth trajectory, adding new brokers to its portfolio and expanding its range of services to cater more effectively to 1099 contractors. As the company looks ahead, its aim is to deliver tailored financial solutions that sync income and expenses, provide cash flow stability, and enable tax and retirement savings. With projections indicating that nearly half of US earnings will be commission-based by the end of this decade, Tongo is undoubtedly on a path of substantial impact and opportunity.
LAB Ventures works strategically with early stage PropTech startups and investors from the Real Estate and Construction industries providing them access to capital, corporate development, customers, innovation and outsized returns through venture capital investments.