In a significant move to overhaul 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 in Fence, a startup dedicated to transforming the operational layer of structured credit deals. The round, which also included investments from Parafi Capital and Crane Ventures, aims to capitalize on Fence's innovative software solution that tackles the fragmented and often manual processes involved in tracking loan pools, verifying collateral, and managing cash flows. By replacing these outdated processes with a single, real-time system, Fence seeks to increase transaction efficiency and provide investors with enhanced visibility into the assets backing their investments.
According to Juan Montero, co-founder and CEO of Fence, the company's approach has already demonstrated its potential to cut costs for major asset managers, with successful collaborations with BBVA, one of Spain's largest banks, overseeing $800 billion in assets. Fence's use of blockchain technology is focused on back-end operations, utilizing smart contracts to manage cash, collateral, and deal terms, rather than promoting tokens or crypto wallets as a front-end product. This strategic approach enables lenders to monitor loan performance and cash flows continuously, reducing the need for periodic reports and streamlining the overall process.
With the new 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 processing and reduced manual steps. The company currently oversees approximately $1.5 billion in assets across its platform, working with prominent firms such as BlackRock and Fortress, and can onboard new deals in a matter of weeks, compared to the months required by standard processes.