A recent $20 million investment round, spearheaded by Galaxy Ventures, aims to transform the $6 trillion asset-backed finance market by integrating blockchain technology. Fence, the recipient of the funding, is a startup focused on developing software for the operational aspects of structured credit deals.
The current system, which relies heavily on manual workflows, spreadsheets, and email, can lead to delayed transactions and limited visibility for investors. Fence seeks to replace this fragmented process with a unified, real-time data updating system. According to Juan Montero, co-founder and CEO of Fence, this approach has the potential to reduce costs for major asset managers.
In collaboration with BBVA, a prominent Spanish bank overseeing $800 billion in assets, Fence has successfully lowered funding costs for borrowers and decreased operational workload while tracking large volumes of loans. The company's utilization of blockchain is primarily focused on back-end operations, employing smart contracts to manage cash, collateral, and deal terms. This enables lenders to continuously monitor loan performance and cash flows, rather than relying on periodic reports.
Fence has reportedly overseen approximately $1.5 billion in assets across its platform, working with notable firms such as BlackRock and Fortress. The newly acquired funding will facilitate the company's expansion in the U.S. and further development of its product, with the goal of reshaping the credit market through enhanced data efficiency and reduced manual processes.