Defense tech billionaire Palmer Luckey is spearheading the launch of Erebor, a digital-only bank targeting startups, cryptocurrency businesses, and defense contractors left underserved after Silicon Valley Bank‘s collapse in March 2023.
What Happened: The venture brings together a powerhouse of tech investors. Joe Lonsdale, founder of venture capital firm 8VC and co-founder of Palantir Technologies Inc. (NYSE:PLTR), confirmed his financial backing to the project. Peter Thiel‘s Founders Fund will also invest, The Financial Times reported, citing sources.
Erebor has filed for a national bank charter with U.S. regulators, seeking to fill the financing gap left when SVB failed. The application, made public this week, states the bank will provide “traditional banking products, as well as virtual currency-related products and services, for businesses and individuals.”
The bank’s target market spans companies in the “innovation economy,” particularly those focused on virtual currencies, artificial intelligence, defense, and manufacturing. It will also serve individuals working for or investing in these sectors, plus non-U.S. companies seeking U.S. banking access.
Stablecoins represent a key strategic focus. These digital currencies pegged to real-world assets like the U.S. dollar will form a significant part of operations. Erebor aims to become “the most regulated entity conducting and facilitating stablecoin transactions,” according to the filing.
Founders Fund did not immediately respond to Benzinga's request for comment.
Why It Matters: The timing reflects broader market conditions. SVB’s assets were sold to First Citizens, which relaunched the brand, while many SVB bankers moved to HSBC’s U.S. operations. Yet investors and executives report persistent gaps in banking services for emerging tech companies, with many startups struggling to access capital, according to the report.
Co-CEOs Jacob Hirshman, former Circle adviser, and Owen Rapaport, co-founder of digital assets firm Aer Compliance, will lead daily operations. Mike Hagedorn, former senior executive vice-president at Valley National Bank, serves as president.
Erebor will operate from Columbus, Ohio, with a New York office, offering purely digital customer service through smartphone apps and websites.
The venture continues a pattern among the founders. Like Anduril and Palantir, Erebor references J.R.R. Tolkien’s works, specifically the “lonely mountain” whose treasures are reclaimed from the dragon Smaug.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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