Anduril CEO Palmer Luckey's new digital banking startup set to be valued at $2 billion, sources say
Erebor, a digital bank aimed at startups and cryptocurrency companies, which might sound a little like the infamous Silicon Valley Bank, is raising at least $225 million at a $2 billion valuation, according to people familiar with the deal.
Founders Fund, the venture firm run by Palantir cofounder Peter Thiel, and 8VC, led by fellow Palantir cofounder Joe Lonsdale, are investing in the company, the people who weren't authorized to speak publicly on the matter said. The fundraise is ongoing, and details could still change.
8VC, Founders Fund and Palmer Luckey did not respond to requests for comment.
Erebor — like Luckey's Anduril as well as Lonsdale and Thiel's Palantir — takes its name from JRR Tolkien's "The Lord of the Rings." In the book, Erebor is the "Lonely Mountain," a kingdom known for its treasure.
The startup recently applied for a US bank charter that would let it operate as a regulated bank. It plans to provide services such as crypto-collateralized lending to startups and crypto clients, according to documents viewed by Business Insider.
Luckey founded Erebor. Jacob Hirshman, who previously worked at stablecoin issuer Circle, and Owen Rapaport, who cofounded now-acquired crypto-monitoring company Aer Compliance, will lead the bank as co-CEOs, the documents said. Mike Hagedorn, previously senior executive vice president and chief financial officer of Valley National Bank, will be the startup's president, according to his LinkedIn.
Hirshman declined to comment. Rapaport and Hagedorn did not respond to requests for comment.
Luckey is also the CEO of Anduril Industries, a defense tech giant he cofounded in 2017 that raised $2.5 billion at a $30.5 billion valuation in June. He also founded virtual reality company Oculus in 2012 at 19 years old and sold it to Facebook, now Meta Platforms, for $2 billion two years later.
In 2016, Luckey was fired from Meta after donating $10,000 to a pro-Donald Trump meme group. (Meta and CEO Mark Zuckerberg have denied that Luckey left over his politics, and the two teamed up again in May, announcing an Anduril-Meta US military partnership.)
Both Lonsdale and Thiel — who lead the venture firms backing Erebor — have supported President Trump. Thiel contributed over $1 million to pro-Trump super PACs and his 2016 campaign, according to the New York Times. Lonsdale has backed the America PAC, which supported Trump's 2024 reelection campaign, the Financial Times reported.
In the first few months of his second term, Trump made moves to support the crypto industry, like creating a strategic bitcoin reserve and appointing venture capitalist David Sacks as Crypto Czar. And Wall Street interest in crypto is on the rise after Circle's IPO in June. Shares in Circle are up over 113% since its public market debut as of the Wednesday close.
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