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 focused on developing software for the operational layer of structured credit deals. The round also saw participation from Parafi Capital and Crane Ventures. Fence aims to replace fragmented and manual processes, which often involve spreadsheets, PDFs, and email, with a single system that updates data in real time.
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 help large asset managers reduce costs. In partnerships with BBVA, one of Spain's largest banks, overseeing $800 billion in assets, Fence has reportedly achieved lower funding costs for borrowers and reduced operational work while tracking large volumes of loans.
Fence utilizes blockchain technology as back-end infrastructure, rather than a front-end product, to manage cash, collateral, and deal terms. The company uses smart contracts to automate processes, such as releasing cash when deal terms are met, and can tokenize lender positions in financing vehicles, allowing for the transfer of positions, borrowing against them, or 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 markets through faster data and reduced manual steps. The company currently oversees 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.