Galaxy Ventures, the venture capital arm of Galaxy Digital, has led a $20 million funding round in Fence, a startup dedicated to transforming the $6 trillion asset-backed finance market by harnessing the power of blockchain technology. This investment, which also includes contributions from Parafi Capital and Crane Ventures, aims to overhaul the traditional manual workflows that dominate the industry. Fence's innovative software focuses on the operational layer of structured credit deals, seeking to replace fragmented and outdated systems with a unified, real-time data management platform. By doing so, Fence enables lenders to continuously monitor loan performance and cash flows, rather than relying on periodic reports, thereby enhancing transparency and reducing costs for major asset managers.
The company's approach has already yielded promising results in collaborations with prominent financial institutions, such as BBVA, where it has successfully lowered funding costs for borrowers and reduced operational workloads. Fence's use of blockchain technology is distinctly behind-the-scenes, utilizing smart contracts to manage cash, collateral, and deal terms, rather than promoting tokens or crypto wallets as a front-end product. This strategic approach allows Fence to rebuild the underlying infrastructure of capital markets, distinguishing itself from other companies that merely digitize paperwork. With the new funding, Fence plans to expand its presence in the U.S.
and further develop its product, driven by the conviction that streamlined data and reduced manual processes can fundamentally reshape the operations of credit markets.