In a significant move to transform the $6 trillion asset-backed finance market, Galaxy Ventures has led a $20 million funding round for Fence, a startup dedicated to developing software solutions for the operational aspects of structured credit deals. The investment, which also included contributions from Parafi Capital and Crane Ventures, aims to harness the power of blockchain technology to overhaul the market's outdated infrastructure.
Fence's innovative approach focuses on creating a unified system that updates data in real-time, thereby replacing the fragmented and manual processes that currently dominate the industry. By doing so, the company seeks to increase transaction speed, enhance visibility for investors, and reduce costs for major asset managers.
Fence's technology has already demonstrated its potential in collaborations with prominent financial institutions, such as BBVA, where it has successfully lowered funding costs for borrowers and minimized operational workload. Rather than emphasizing blockchain as a front-end product, Fence utilizes it as a back-end solution, employing smart contracts to manage cash, collateral, and deal terms. This strategic approach enables the company to provide a more efficient and streamlined experience for lenders and investors alike.
With its sights set on expanding in the U.S. and further developing its product, Fence is poised to play a pivotal role in reshaping the credit market's underlying infrastructure.