A recent $20 million funding round, spearheaded by Galaxy Ventures, aims to revolutionize the $6 trillion asset-backed finance market by harnessing blockchain technology. This market, where many transactions still rely on manual workflows, is poised for disruption. Fence, the startup at the forefront of this effort, has developed software to manage the operational aspects of structured credit deals. By consolidating fragmented processes and replacing outdated methods such as spreadsheets, PDFs, and email, Fence's platform updates data in real-time, enabling lenders to monitor loan performance and cash flows continuously.
According to Juan Montero, co-founder and CEO of Fence, this approach can significantly reduce costs for major asset managers. The company has already demonstrated its potential in deals with BBVA, one of Spain's largest banks, overseeing $800 billion in assets. Fence's use of blockchain is primarily focused on back-end operations, utilizing smart contracts to manage cash, collateral, and deal terms.
This approach enables the company to process information swiftly, releasing cash when deal terms are met. While tokenization is also employed, it is only used where it adds value. With approximately $1.5 billion in assets currently overseen across its platform, working with firms like BlackRock and Fortress, Fence is well-positioned for expansion in the U.S.
and further product development, driven by its mission to reshape the credit markets through enhanced data processing and reduced manual steps.