A recent $20 million funding round, spearheaded by Galaxy Ventures, aims to transform the $6 trillion asset-backed finance market by harnessing blockchain technology to streamline processes. Fence, the recipient startup, is developing software to manage the operational aspects of structured credit deals. This layer, which encompasses tracking loan pools, verifying collateral, and facilitating cash transfers, is often fragmented and relies on outdated methods such as spreadsheets, PDFs, and email.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 collaboration with BBVA, one of Spain's largest banks, Fence has reported 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. This approach enables Fence to automate tasks such as data verification, report generation, and payment processing, resulting in faster transaction times and enhanced visibility for investors.
Fence has chosen to use blockchain as a behind-the-scenes solution, focusing on building infrastructure for capital markets rather than promoting tokens or crypto wallets. The company has seen significant growth, currently overseeing approximately $1.5 billion in assets across its platform, and working with prominent firms such as BlackRock and Fortress.
With the newly acquired funding, Fence plans to expand its operations in the U.S. and further develop its product, with the goal of reshaping the credit market's operational framework.