Galaxy Ventures, the venture capital arm of Mike Novogratz's Galaxy Digital, has led a $20 million funding round for Fence, a startup focused on overhauling the $6 trillion asset-backed finance market by harnessing blockchain technology. The investment, which also included Parafi Capital and Crane Ventures, aims to transform the operational layer of structured credit deals.
This layer, currently fragmented and reliant on manual processes, can be slow and lack transparency. Fence's software seeks to replace these processes with a unified system, providing real-time data updates and enhanced visibility for investors. According to Juan Montero, co-founder and CEO of Fence, the company's approach can reduce costs for major asset managers.
Fence has already demonstrated the effectiveness of its approach in deals with BBVA, one of Spain's largest banks, overseeing $800 billion in assets. By utilizing blockchain as back-end infrastructure, Fence streamlines the management of cash, collateral, and deal terms, without requiring the use of tokens or crypto wallets.
The company can also tokenize lender positions, enabling investors to transfer positions, borrow against them, or receive payments automatically. With this investment, 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 and reduced manual steps.