A recent $20 million funding round, spearheaded by Galaxy Ventures, aims to transform the $6 trillion asset-backed finance market by leveraging blockchain technology to streamline manual workflows. Fence, the recipient of the investment, is developing software to manage the operational aspects of structured credit deals. The current system, which relies heavily on spreadsheets, PDFs, and email, can lead to delayed transactions and limited visibility for investors. Fence's solution, according to CEO Juan Montero, involves a single, real-time data updating system, enabling lenders to continuously monitor loan performance and cash flows.
This approach has reportedly reduced funding costs for borrowers and operational work in deals with BBVA, a Spanish bank overseeing $800 billion in assets. Rather than promoting tokens or crypto wallets, Fence utilizes blockchain as back-end infrastructure, employing smart contracts to manage cash, collateral, and deal terms. By automating these processes, Fence can reduce the time it takes for loan data to be checked, reports to be sent, and payments to be cleared.
The company has also tokenized lender positions in financing vehicles and underlying loans, allowing for the transfer of positions, borrowing, and automatic payment upon ownership changes. 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 market's operational landscape.