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 overhaul manual workflows. The investment, which also included Parafi Capital and Crane Ventures, will support Fence, a startup developing software to manage the operational aspects of structured credit deals.
Currently, these processes are often fragmented, relying on spreadsheets, PDFs, and email, which can slow transactions and limit investor visibility. Fence seeks to replace these processes with a unified system that provides real-time data updates, enabling lenders to continuously monitor loan performance and cash flows. According to Juan Montero, co-founder and CEO of Fence, this approach can reduce costs for major asset managers.
In partnership with BBVA, one of Spain's largest banks, overseeing $800 billion in assets, Fence has reported lower funding costs for borrowers and decreased operational workload while tracking large volumes of loans. Fence utilizes blockchain as back-end infrastructure, managing cash, collateral, and deal terms via smart contracts, rather than promoting tokens or crypto wallets to banks and asset managers. By leveraging APIs, software checks, and smart contracts, Fence can expedite loan data verification, reporting, and payment processing.
The company can also tokenize lender positions in financing vehicles and underlying loans or invoices, facilitating the transfer of positions, borrowing, or automatic payments. With this funding, Fence plans to expand its presence in the U.S. and enhance its product, aiming to reshape credit market operations through faster data processing and reduced manual steps.