Galaxy Ventures, the venture capital arm of Galaxy Digital, has led a $20 million funding round for Fence, a startup focused on transforming the operational layer of structured credit deals using blockchain technology. This investment aims to overhaul the $6 trillion asset-backed finance market, which still relies heavily on manual workflows. Fence's software handles the operational aspects of these deals, including tracking loan pools, verifying collateral, and managing cash flows.
By replacing fragmented and outdated processes with a single, real-time system, Fence seeks to increase efficiency, reduce costs, and provide investors with greater visibility into their assets. The company has already demonstrated the effectiveness of its approach in deals with major banks like BBVA, resulting in lower funding costs for borrowers and reduced operational work. Fence's use of blockchain is primarily as a back-end solution, utilizing smart contracts to manage cash, collateral, and deal terms, rather than as a front-end product.
This approach enables the company to tokenize lender positions and underlying assets, allowing for the automation of payments and transfers. With this funding, Fence plans to expand its presence in the U.S. and further develop its product, aiming to reshape the credit market by reducing manual steps and increasing data speed.