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Friday Harbor Raises $6M to Bring AI Efficiency to Mortgages

Startups

Business Honor
15 April, 2025

Friday Harbor’s AI software helps lenders cut mortgage costs and processing delays using automation.

Friday Harbor, which was founded a year ago, revealed on Tuesday that San Francisco investment companies Mischief and Abstract Ventures are leading a $6 million seed round. Friday Harbor wants to help other lenders that may use artificial intelligence to stay competitive while having lessser resources.

16 enterprise clients have used the company's software since its October launch to examine a borrower's loan file and promptly spot problems in real-time, some of which are usually discovered by an underwriter weeks later. Unreported debts, big deposits, inconsistencies between paperwork, challenges with employment history, and other factors that could lead to a last-minute mortgage collapse can all be detected by its system.

Theo Ellis, CEO and co-founder of Friday Harbor, stated that complicated mortgage regulations and investor standards are mostly to blame for the almost threefold increase in mortgage production costs since 2008. This indicates that in the face of increased competition, lenders are searching for methods to maintain cheap costs and expedite loan processing. Ellis especially mentioned Rocket, which recently announced that it had acquired Mr. Cooper, the biggest mortgage servicer in the country that oversees the continuous administration of a loan and has direct access to homeowners who might be considering refinancing.

Friday Harbor has funded over $8 million so far and employs eight people. Wischoff Ventures and AI2 Incubator are additional funders. Numerous businesses, including Seattle-based Tomo, Novaprime, Valon and Roam are trying to expedite or disrupt certain parts of the mortgage process. Tomo recently raised $20 million.