A recent $20 million funding round, spearheaded by Galaxy Ventures, aims to transform the $6 trillion asset-backed finance market by harnessing blockchain technology. Fence, the recipient of the investment, is developing software to streamline the operational aspects of structured credit deals, which often rely on manual workflows and fragmented systems.
By implementing a unified system that updates data in real-time, Fence seeks to replace traditional processes, enabling lenders to continuously monitor loan performance and cash flows. This approach has the potential to reduce costs for major asset managers, as evidenced by Fence's collaboration with BBVA, where it reported lower funding costs for borrowers and decreased operational workload.
Fence utilizes blockchain as a back-end solution, employing smart contracts to manage cash, collateral, and deal terms, thereby accelerating transaction processing. The company's platform currently oversees approximately $1.5 billion in assets and has partnered with prominent firms, including BlackRock and Fortress. With the newly acquired 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.