In a move to transform the $6 trillion asset-backed finance market, a $20 million funding round has been secured by Fence, a startup focused on streamlining the operational aspects of structured credit deals. The investment, led by Galaxy Ventures, the venture capital arm of Mike Novogratz's Galaxy Digital, also included participation from Parafi Capital and Crane Ventures. Fence's software aims to tackle the fragmented and manual processes that currently dominate the industry, such as tracking loan pools, verifying collateral, and managing cash flows, which are often handled through spreadsheets, PDFs, and email.
By replacing these outdated methods with a unified, real-time system, Fence seeks to increase efficiency, reduce costs, and provide investors with enhanced visibility into the assets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 can significantly cut costs for major asset managers, as evidenced by its work with BBVA, where it reported lower funding costs for borrowers and reduced operational workload while tracking large volumes of loans.
Fence's use of blockchain is primarily focused on back-end infrastructure, utilizing smart contracts to manage cash, collateral, and deal terms, rather than promoting tokens or crypto wallets to its clients. By automating data checks and payment releases, Fence can accelerate transaction processing, reducing the waiting time from days to near real-time.
The company has also successfully tokenized lender positions in financing vehicles and underlying assets, enabling investors to transfer positions, borrow against them, or receive payments automatically. With this 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 minimized manual intervention. Currently, Fence 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 traditional processes.