A $20 million funding round led by Mike Novogratz’s Galaxy Digital (GLXY) is backing a push to use blockchain behind the scenes to reshape the $6 trillion asset-backed financial market, where many deals still rely on manual workflows.
The round, which included Parafi Capital and Crane Ventures, was for Fence, a startup that creates software to handle the operational layer of structured credit agreements.
That layer—from tracking loan pools to collateral verification and cash movement—is often fragmented across multiple companies and still runs on spreadsheets, PDFs, and email. The setup can slow down transactions and leave investors with limited visibility into the assets backing their investments.
Fence aims to replace those 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 continually monitor loan performance and cash flows, rather than relying on periodic reporting, he explained.
The company says that approach can reduce costs for large asset managers. In deals with BBVA, one of Spain’s largest banks overseeing $800 billion in assets, Fence reported lower financing costs for borrowers and reduced operational work, while continuously monitoring large loan volumes.
Blockchain in the background
Fence is using blockchain less as a front-end product than as back-end plumbing. The company does not offer banks or asset managers crypto tokens or wallets. Instead, it uses smart contracts behind the scenes to manage the cash, collateral, and rules that govern these agreements.
In a typical setup, lenders can wait days for loan data to be verified, reports to be submitted and payments to clear, Montero said. Fence extracts that information through APIs, runs checks in software and uses smart contracts to release cash when the terms of the agreement are met, he said.
The company may also tokenize lenders’ positions in financing vehicles and, in some cases, the underlying loans or invoices. That can allow investors to transfer positions, borrow against them or receive payments automatically if ownership changes. Still, Montero said tokenization is only used when 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 digitize the paperwork. Fence rebuilt the pipes.”
The company says it now oversees about $1.5 billion in assets across its platform, working with the likes of BlackRock and Fortress. You can onboard new deals in weeks, compared to months under standard processes.
The funding will help the company expand in the U.S. and develop its product, Montero said, betting that faster data and fewer manual steps can reshape the way credit markets operate behind the scenes.
