Galaxy Ventures, the venture capital arm of Galaxy Digital, has led a $20 million funding round for Fence, a startup developing software to modernize the operational aspects of structured credit deals. This investment aims to transform the $6 trillion asset-backed finance market by introducing blockchain technology to automate manual workflows. Fence's platform handles the operational layer of these deals, from tracking loan pools to verifying collateral and facilitating cash movements, which are often fragmented and reliant on outdated methods such as spreadsheets and email.
By replacing these processes with a single, real-time system, Fence enables lenders to continuously monitor loan performance and cash flows, reducing transaction times and increasing investor visibility. The company has reported successful collaborations with major banks, including BBVA, resulting in lower funding costs for borrowers and reduced operational work.
Fence utilizes blockchain as a back-end solution, employing smart contracts to manage cash, collateral, and deal terms, rather than promoting tokens or crypto wallets as a front-end product. This approach allows for the tokenization of lender positions and underlying assets, facilitating the transfer of positions, borrowing, and automatic payments. With this funding, Fence plans to expand its presence in the U.S. and further develop its product, with the goal of reshaping the credit market's operational landscape through increased efficiency and reduced manual steps.