A recent $20 million funding round, led by Galaxy Ventures, the venture capital arm of Galaxy Digital, is set to transform the $6 trillion asset-backed finance market by introducing blockchain technology to overhaul manual workflows. The round, which also included investments from Parafi Capital and Crane Ventures, will support Fence, a startup developing software to handle the operational aspects of structured credit deals.
Currently, these processes are often fragmented across multiple firms, relying on outdated methods such as spreadsheets, PDFs, and email, which can slow down transactions and limit investor visibility. Fence aims to replace these processes 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. In partnership with BBVA, one of Spain's largest banks, overseeing $800 billion in assets, Fence has reported lower funding costs for borrowers and reduced operational work while tracking large volumes of loans.
The company utilizes blockchain technology as back-end infrastructure, rather than a front-end product, to manage cash, collateral, and deal rules using smart contracts. This approach enables lenders to monitor loan performance and cash flows continuously, rather than relying on periodic reports.
Fence has overseen approximately $1.5 billion in assets across its platform, working with firms such as BlackRock and Fortress, and can onboard new deals in weeks, compared to months under standard processes. The funding will facilitate the company's expansion in the U.S. and product development, with the goal of reshaping the credit market through faster data and fewer manual steps.