A $20 million funding round led by Mike Novogratz’s Galaxy Digital (GLXY) supports the drive to use blockchain behind the scenes to restructure the $6 trillion asset-backed financial market, where many transactions still rely on manual workflows.
The round, which included Parafi Capital and Crane Ventures, was awarded to Fence, a startup software for managing the operational layer of structured credit operations.
This layer – from tracking loan pools to verifying collateral and moving cash – is often fragmented across multiple companies and still operates on spreadsheets, PDFs and emails. This setup can slow down transactions and leave investors with limited visibility into the assets supporting their investments.
Fence aims to replace these processes with a single system that updates data in real time, Juan Montero, co-founder and CEO of Fence, told CoinDesk in an interview. Lenders can continuously monitor loan performance and cash flow, rather than relying on periodic reports, he explained.
The company says this approach can reduce costs for large asset managers. Under agreements with BBVA, one of Spain’s largest banks overseeing $800 billion in assets, Fence reported lower funding costs for borrowers and reduced operational work, while continuously tracking large loan volumes.
Blockchain in the background
Fence uses blockchain less as a front-end product and more as a back-end plumbing. The Company does not offer crypto tokens or wallets to banks and asset managers. Instead, it uses smart contracts behind the scenes to manage the liquidity, collateral, and rules that govern these transactions.
In a typical setup, lenders can wait days for loan data to be verified, reports to be sent and payments to be settled, Montero said. Fence extracts this information through APIs, runs checks in software and uses smart contracts to unlock liquidity when transaction conditions are met, he said.
The Company may also tokenize lenders’ positions in financing vehicles and, in some cases, the underlying loans or invoices. This can allow investors to transfer their positions, borrow against them, or receive payments automatically if there is a change in ownership. Still, Montero said tokenization is only used where it adds value.
“We don’t want to be seen as a blockchain company. We are building the infrastructure for the capital markets,” Montero said. “Others are scanning documents. Fence redid the plumbing.”
The company says it now oversees around $1.5 billion in assets on its platform, working with companies including BlackRock and Fortress. It can onboard new offerings in weeks, compared to months under standard processes.
The funding will help the company expand into the U.S. and develop its product, Montero said, betting that faster data and fewer manual steps can reshape the way credit markets work behind the scenes.
