TLDR

  • Erebor—co-founded by Palmer Luckey, CEO of defense firm Anduril—secured $350 million in funding at a $4.35 billion valuation, with Lux Capital leading the round
  • Last week, the FDIC approved Erebor’s deposit insurance application, bringing the company closer to becoming a chartered national bank
  • Erebor intends to serve tech companies focused on cryptocurrency, AI, defense, and manufacturing sectors
  • Launched in 2025, Erebor was created to address banking gaps that arose after Silicon Valley Bank’s 2023 collapse
  • Current backers include Peter Thiel’s Founders Fund, 8VC, and Haun Ventures

Erebor, a fledgling banking startup co-founded by Palmer Luckey, has raised $350 million at a valuation of $4.35 billion. Per sources cited by Axios, Lux Capital spearheaded the funding round.

This fundraising comes on the heels of the Federal Deposit Insurance Corporation approving Erebor’s deposit insurance application last week. The approval marks a key milestone in establishing Erebor as a newly chartered national bank.

Luckey, who leads defense contractor Anduril as CEO, co-founded Erebor in 2025 alongside Joe Lonsdale. The company counts Peter Thiel’s Founders Fund, 8VC, and Haun Ventures among its backers.

Erebor launched to fill gaps in the banking sector that emerged after Silicon Valley Bank’s March 2023 collapse. Prior to its failure, SVB was the primary banking partner for many venture-backed tech companies.

The bank’s collapse occurred when rapid interest rate hikes eroded the value of SVB’s long-term securities, followed by a depositor run that led to one of the largest bank failures since the 2008 financial crisis.

Target Market and Services

Erebor plans to offer both traditional banking services and crypto-related products. The company outlined its target market in its banking application to regulators.

“The target market for the Bank comprises businesses that are part of the United States innovation economy, in particular technology companies focused on virtual currencies, artificial intelligence, defense, and manufacturing, as well as payment service providers, investment funds and trading firms,” Erebor stated in its application.

Luckey previously founded Oculus VR, the virtual reality headset maker acquired by Facebook. He later co-founded Anduril Industries, where he currently serves as CEO.

Erebor’s name follows a pattern seen in other projects linked to Thiel; it is named after a mountain in J.R.R. Tolkien’s “The Lord of the Rings” book series.

Regulatory Progress and Timeline

received preliminary conditional approval from the Office of the Comptroller of the Currency earlier this year. This represents another regulatory hurdle cleared on the path to becoming a fully licensed bank.

The FDIC’s deposit insurance approval remains valid for 12 months. It will expire if Erebor is not formally established or if the FDIC does not grant an extension.

Axios reported that Erebor is likely to launch next year. The Financial Times noted in October that Erebor’s application did not receive special treatment from the Trump administration.

This occurred despite longstanding ties between the Trump administration and Luckey, Lonsdale, and Thiel. The regulatory process followed standard procedures for new bank charters.

Erebor joins other companies entering the digital asset banking space. , Circle, and Ripple Labs have sought national trust charters or similar approvals from the OCC.

David Sacks, who serves as the crypto and AI czar under President Trump, wrote Monday that the SEC and CFTC are expected to issue clear regulatory guidelines for cryptocurrencies. The FDIC deposit insurance approval was granted last week.