Galaxy Ventures, the venture capital arm of Mike Novogratz's Galaxy Digital, has led a $20 million funding round for Fence, a startup developing software to streamline the operational aspects of structured credit deals. This investment aims to transform the $6 trillion asset-backed finance market, which still heavily relies on manual processes. The funding round, which also included investments from Parafi Capital and Crane Ventures, will support Fence's mission to overhaul the fragmented and inefficient systems currently in place. Fence's software seeks to replace traditional methods, such as spreadsheets, PDFs, and email, with a single, real-time system for tracking loan pools, verifying collateral, and managing cash flows.
According to Juan Montero, co-founder and CEO of Fence, this approach can significantly reduce costs for major asset managers and provide lenders with continuous monitoring capabilities, rather than relying on periodic reports. Fence has already demonstrated the effectiveness of its approach in deals with BBVA, one of Spain's largest banks, resulting in lower funding costs for borrowers and reduced operational work. The company utilizes blockchain technology as a back-end solution, employing smart contracts to manage cash, collateral, and deal terms, rather than promoting tokens or crypto wallets as a front-end product.
By automating manual processes and increasing efficiency, Fence aims to reshape the credit market's operational landscape. With this investment, Fence plans to expand its presence in the U.S.
and further develop its product, with the goal of revolutionizing the way credit markets operate.