Galaxy Ventures Leads $20 Million Investment in Fence to Revolutionize $6 Trillion Credit Market

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 transforming the $6 trillion asset-backed finance market. The round, which also included investments from Parafi Capital and Crane Ventures, aims to utilize blockchain technology to streamline the operational layer of structured credit deals.

Currently, this layer is often fragmented and reliant on manual processes, utilizing spreadsheets, PDFs, and email, which can slow transactions and limit investor visibility. Fence seeks to replace these outdated processes with a single, real-time system. According to Juan Montero, co-founder and CEO of Fence, this approach enables lenders to continuously monitor loan performance and cash flows, rather than relying on periodic reports.

The company claims that its approach can significantly reduce costs for major asset managers. In collaborations with BBVA, one of Spain's largest banks, overseeing $800 billion in assets, Fence reported lower funding costs for borrowers and reduced operational workload while tracking large volumes of loans. Fence utilizes blockchain as back-end infrastructure, rather than as a front-end product, employing smart contracts to manage cash, collateral, and deal terms.

This approach allows for the automation of tasks, such as data verification and payment processing, which can take days in traditional facilities. The company can also tokenize lender positions and underlying assets, enabling investors to transfer positions, borrow against them, or receive automatic payments. However, tokenization is only used when it adds value. With this funding, Fence plans to expand its presence in the U.S.

and further develop its product, aiming to reshape the credit market by reducing manual steps and increasing data speed. 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 weeks, compared to months under standard processes.