Galaxy Digital Backs Fintech Firm Fence in $20 Million Funding Round to Modernize Credit Markets
San Francisco, CA – April 29, 2026 – Fintech startup Fence has secured $20 million in a funding round led by Galaxy Digital, aiming to overhaul the operational layer of the $6 trillion asset-backed finance market. The investment will fuel the company’s expansion in the United States and further development of its blockchain-based platform designed to automate traditionally manual processes. The funding round also included participation from Parafi Capital and Crane Ventures.
Fence’s technology focuses on streamlining verification, calculation, and cash management within asset-backed facilities, offering real-time operational control and transparency for lenders. The company distinguishes itself by operating “behind the scenes,” leveraging blockchain, smart contracts, and tokenization without explicitly branding itself as a “blockchain company,” according to CEO Juan Montero. This approach is intended to appeal to a broader range of financial institutions hesitant to fully embrace decentralized technologies.
Addressing Inefficiencies in a $6 Trillion Market
The asset-backed finance market, encompassing loans secured by assets like mortgages, auto loans, and credit card receivables, has long been plagued by fragmented workflows and reliance on outdated systems. Currently, many deals depend on spreadsheets, PDFs, and email communication, leading to slower transaction times and limited visibility into the underlying assets for investors. Fence aims to replace this patchwork system with a unified platform that provides real-time data updates and automated processes.
“Lenders can monitor loan performance and cash flows continuously, rather than relying on periodic reports,” Montero explained in an interview with CoinDesk. This continuous monitoring capability is a core component of Fence’s value proposition, offering enhanced risk management and improved decision-making for lenders and investors.
How Fence Works: A Four-Pronged Approach
Fence’s platform offers four key agency functions unified into a single system. These include Verification Agency, which performs asset existence checks and detects double-pledging. Calculation Agency, handling asset eligibility and covenant tracking; Cash Management, encompassing drawdowns and cash recycling; and Data Analysis & Portfolio Aggregation, providing simulations and portfolio-wide analytics. According to the company’s website, these functions are mandated at the facility level and can be modularly integrated into existing or new Special Purpose Vehicles (SPVs).
A key differentiator for Fence is its continuous verification process. Instead of relying on sample-based annual audits, the platform verifies 100% of assets against independent sources. Similarly, calculations are performed on live data, providing automated certificates instead of month-end snapshots and manual reports. The cash management function offers same-day funding and intraday cash recycling, eliminating idle capital and manual reconciliation.
Existing Client Base and Future Expansion
Fence has already secured partnerships with major financial institutions, including BBVA, BlackRock, and Fortress. These collaborations demonstrate the platform’s appeal to established players in the asset-backed finance market. The company facilitated a financing agreement of up to €20 million between BBVA Spark and Payflow in 2023, showcasing its capabilities. Fintech Global reported on this agreement in November 2023.
The $20 million in funding from Galaxy Digital will be primarily used to expand Fence’s operations within the United States. The company plans to leverage its existing client base and the new capital to further penetrate the market and establish itself as a leading provider of operational infrastructure for structured credit deals.
The Role of Blockchain and Tokenization
While Fence doesn’t position itself as a purely blockchain-focused company, the underlying technology plays a crucial role in its functionality. Blockchain and smart contracts are used to automate capital and asset transfers, ensuring compliance with credit agreement clauses, such as concentration limits. This automation reduces manual errors and increases efficiency in the traditionally complex process of asset-backed finance.
The employ of tokenization allows for the fractional ownership of assets, potentially increasing liquidity and accessibility within the market. However, Fence’s focus remains on providing a robust and reliable operational layer, rather than directly engaging in the creation or trading of digital assets.
Galaxy Digital’s Investment Strategy
Mike Novogratz’s Galaxy Digital, a prominent investor in the digital asset and fintech space, has been actively seeking opportunities to integrate blockchain technology into traditional financial markets. The investment in Fence aligns with this strategy, demonstrating a belief in the potential of blockchain to improve efficiency and transparency in the $6 trillion asset-backed finance sector.
Galaxy Digital’s backing provides Fence with not only capital but also access to a network of industry experts and potential partners. This strategic alliance could accelerate the company’s growth and facilitate wider adoption of its platform.
Looking Ahead: The Future of Asset-Backed Finance
The asset-backed finance market is undergoing a period of significant transformation, driven by technological advancements and increasing demand for transparency and efficiency. Companies like Fence are at the forefront of this change, offering innovative solutions that address the challenges of outdated systems and manual processes.
As more financial institutions embrace blockchain and automation, the operational layer of asset-backed finance is likely to turn into increasingly streamlined and data-driven. Fence’s platform is well-positioned to capitalize on this trend, providing a critical infrastructure for the future of the industry.
The next step for Fence will be focused on scaling its operations in the U.S. Market and expanding its client base. Further developments and partnerships are expected in the coming months as the company continues to refine its platform and address the evolving needs of the asset-backed finance industry. Investors and industry observers will be closely watching Fence’s progress as it seeks to disrupt a traditionally complex and opaque market.
Key Takeaways:
- Fence has raised $20 million in a funding round led by Galaxy Digital to modernize the asset-backed finance market.
- The company’s platform automates key processes such as verification, calculation, and cash management using blockchain technology.
- Fence works with major financial institutions like BBVA, BlackRock, and Fortress.
- The investment will be used to expand operations in the United States and further develop the platform.
- Fence aims to provide real-time data and transparency to lenders and investors in the $6 trillion asset-backed finance market.
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