Palmer Luckey’s Erebor is now valued at $4.35 Billion after Regulators Approve Bank Charter
Erebor, the banking startup co-founded by Palmer Luckey, the founder of Oculus and defense technology firm Anduril, and Joe Lonsdale, co-founder of Palantir, has achieved a valuation of $4.35 billion following a fresh capital raise of $350 million. This news arrives on the heels of the Federal Deposit Insurance Corporation (FDIC) approving Erebor’s deposit insurance application. The FDIC's decision allows Erebor to operate as a newly chartered national bank.
The funding round was led by Lux Capital, with participation from existing investors, including Founders Fund, 8VC, and Haun Ventures. The FDIC approval marks a significant milestone, removing one of the most challenging regulatory obstacles for launching a new national bank. This allows Erebor to accept insured deposits and operate under a federal banking charter, a rare achievement for newly formed institutions, especially those planning to serve crypto-linked and frontier technology sectors.
Erebor, headquartered in Columbus, Ohio, aims to serve companies in the technology, payment systems, investment, and defense industries, including virtual currency market participants. The bank intends to provide traditional banking services alongside products tailored for technology-heavy sectors, such as crypto companies, AI firms, defense contractors, advanced manufacturing businesses, payment providers, investment funds, and trading firms operating within the "United States innovation economy". Erebor is expected to launch in late 2026 or early 2027 as a digital-only bank without physical branches.
The approval places Erebor among a small group of post-2020 de novo banks to secure deposit insurance, which is a notable regulatory outcome, especially as US oversight of banking and digital assets remains tight. The FDIC stated that Erebor Bank satisfied the statutory factors for approval, subject to certain conditions. These conditions include implementing protocols to comply with FDIC regulations regarding the processing of deposit accounts in the event of a bank failure and maintaining a minimum 12 percent Tier 1 leverage ratio during its first three years of operation.
Erebor's founders and early backers have well-known political ties. Luckey, Lonsdale, and Founders Fund co-founder Peter Thiel have publicly supported former President Donald Trump and candidates aligned with his administration. This background has raised questions about whether Erebor received favorable regulatory treatment; however, a report by the Financial Times indicated that the bank's application did not receive special consideration and went through the standard approval process. Regulators reportedly applied the same requirements used for other de novo bank applicants, despite the founders' visibility and connections.
The Office of the Comptroller of the Currency (OCC) granted Erebor preliminary conditional approval for a de novo national bank charter. The OCC's conditional charter approval letter states that Erebor Bank will operate as a full-service insured national bank that plans to target its products and services to technology companies and ultra-high-net-worth individuals that utilize virtual currencies. The bank plans to offer a variety of lending and deposit products and other related services. The OCC has stipulated that Erebor Bank must meet several requirements before gaining final approval, including maintaining a minimum 12% Tier 1 Leverage ratio for the first three years, engaging an independent external auditor, and passing a pre-opening examination.
With its focus on serving the "underserved" in the innovation economy, Erebor aims to fill a void left by the collapse of Silicon Valley Bank in 2023. By combining conventional banking services with expertise in digital assets and frontier technologies, Erebor is positioning itself as a key player in the evolving financial landscape.
