In a significant move to transform the $6 trillion asset-backed finance market, Galaxy Ventures, the venture capital arm of Mike Novogratz's Galaxy Digital, has led a $20 million funding round in Fence, a startup dedicated to streamlining the operational layer of structured credit deals. The round also saw participation from Parafi Capital and Crane Ventures. Fence's software aims to replace the traditionally fragmented and manual processes, which often involve multiple firms, spreadsheets, PDFs, and email, with a unified system that provides real-time updates.
According to Juan Montero, co-founder and CEO of Fence, this approach enables lenders to continuously monitor loan performance and cash flows, rather than relying on periodic reports. The company claims that its solution can reduce costs for major asset managers, as evidenced by its partnership with BBVA, one of Spain's largest banks, overseeing $800 billion in assets.
Fence's use of blockchain is primarily focused on back-end operations, utilizing smart contracts to manage cash, collateral, and deal terms, rather than promoting tokens or crypto wallets as a front-end product. By leveraging APIs, software checks, and smart contracts, Fence can facilitate faster and more efficient transactions, allowing investors to transfer positions, borrow against them, or receive payments automatically. With this funding, Fence plans to expand its presence in the U.S. and further develop its product, with the goal of reshaping the credit markets through enhanced data speed and reduced manual processes.
Currently, the company oversees approximately $1.5 billion in assets across its platform, working with prominent firms such as BlackRock and Fortress, and can onboard new deals in a matter of weeks, compared to the standard process which takes months.