In a bid 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 for Fence, a startup developing software to handle the operational aspects of structured credit deals. The round also saw participation from Parafi Capital and Crane Ventures. Fence's software aims to replace fragmented and manual processes, such as tracking loan pools, verifying collateral, and managing cash flows, with a single, real-time system.
According to Juan Montero, co-founder and CEO of Fence, this approach can reduce costs for large asset managers and provide investors with greater visibility into the assets backing their investments. Fence has already seen success in deals with BBVA, one of Spain's largest banks, where it reported lower funding costs for borrowers and reduced operational work. The company utilizes blockchain technology as back-end infrastructure, using smart contracts to manage cash, collateral, and deal terms, rather than as a front-end product.
This approach enables lenders to monitor loan performance and cash flows continuously, rather than relying on periodic reports. Fence's platform currently oversees approximately $1.5 billion in assets and works with firms such as BlackRock and Fortress. The funding will be used to expand the company's presence in the U.S.
and further develop its product, with the goal of reshaping the credit markets through faster data and reduced manual steps.