A recent $20 million funding round, spearheaded by Galaxy Ventures, aims to revolutionize the $6 trillion asset-backed finance market by implementing blockchain technology. This market, where many transactions still rely on manual workflows, is poised for disruption. The funding round, which also included investments from Parafi Capital and Crane Ventures, will support Fence, a startup focused on developing software for the operational layer of structured credit deals. This layer, which encompasses tasks such as tracking loan pools, verifying collateral, and managing cash flows, is often fragmented and reliant on outdated methods like spreadsheets, PDFs, and email.

Fence seeks to replace these processes with a unified system that provides real-time updates, enabling lenders to continuously monitor loan performance and cash flows. According to Juan Montero, co-founder and CEO of Fence, this approach can significantly reduce costs for major asset managers. In collaborations with BBVA, a prominent Spanish bank overseeing $800 billion in assets, Fence has demonstrated lower funding costs for borrowers and decreased operational workload while tracking large volumes of loans. The company utilizes blockchain as a backend solution, leveraging smart contracts to manage cash, collateral, and deal terms without promoting tokens or crypto wallets to banks and asset managers.

By integrating APIs, software checks, and smart contracts, Fence can accelerate the processing of loan data, reports, and payments. The company can also tokenize lender positions in financing vehicles and underlying loans or invoices, facilitating the transfer of positions, borrowing, or automatic payments in the event of ownership changes. However, tokenization is only employed where it adds value. As Montero emphasized, "We don't want to be seen as a blockchain company.

We're building the infrastructure for the capital markets. Others digitize the paperwork. Fence rebuilt the plumbing." With approximately $1.5 billion in assets managed across its platform, working with firms like BlackRock and Fortress, Fence can onboard new deals in weeks, compared to months under standard processes. The funding will enable the company to expand its presence in the U.S.

and further develop its product, driven by the conviction that faster data and reduced manual steps can transform the credit markets.