Palmer Luckey’s New Bank Hits $4.35 Billion Valuation After FDIC Green Light

TLDR

• Erebor, co-founded by Anduril CEO Palmer Luckey, raised $350 million at a $4.35 billion valuation with Lux Capital leading the round
• The FDIC approved Erebor’s deposit insurance application last week, moving the company closer to becoming a chartered national bank
• Erebor plans to serve technology companies focused on crypto, AI, defense, and manufacturing sectors
• The company emerged in 2025 as a response to banking gaps left after Silicon Valley Bank’s collapse in 2023
• Existing backers include Peter Thiel’s Founders Fund, 8VC, and Haun Ventures

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Erebor, a new banking startup co-founded by Palmer Luckey, has raised $350 million at a $4.35 billion valuation. Lux Capital led the funding round, according to sources cited by Axios.

The fundraising comes after the Federal Deposit Insurance Corporation approved Erebor’s deposit insurance application last week. This approval marks a key step toward establishing Erebor as a newly chartered national bank.

Luckey, who serves as CEO of defense contractor Anduril, founded Erebor in 2025 alongside Joe Lonsdale. The company has backing from Peter Thiel’s Founders Fund, 8VC, and Haun Ventures.

Erebor launched in response to banking sector gaps that appeared after Silicon Valley Bank collapsed in March 2023. SVB had been the primary banking partner for many venture-backed technology companies before its failure.

The bank failure occurred after rapid interest rate hikes eroded the value of SVB’s long-term securities. A depositor run followed, leading to one of the largest bank failures since the 2008 financial crisis.

Target Market and Services

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

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

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

Regulatory Progress and Timeline

Erebor 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. The approval will expire if Erebor is not formally established or if the FDIC does not grant an extension.

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

This occurred despite the 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. Coinbase, 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.

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