A coalition of prominent tech billionaires, led by Palmer Luckey, co-founder of defense firm Anduril, has announced the creation of Erebor, a digital-first U.S. bank designed to serve startups, particularly those in cryptocurrency, artificial intelligence, defense, and manufacturing sectors. This initiative is backed by influential investors including Peter Thiel’s Founders Fund and Joe Lonsdale, co-founder of 8VC and Palantir Technologies.
Erebor aims to fill the void left by the collapse of Silicon Valley Bank (SVB) in March 2023, which had been a critical banking partner for many high-risk startups and crypto companies. By focusing on businesses often overlooked by traditional banks, Erebor plans to provide both conventional banking services and innovative financial products tailored to the digital asset economy, including stablecoin deposits and transactions. The bank’s charter application emphasizes its goal to become a highly regulated institution facilitating stablecoin operations, ensuring compliance and security in this emerging space.
The bank will operate exclusively online, with headquarters in Columbus, Ohio, and a secondary office in New York. Leadership will be under co-CEOs Owen Rapaport, CEO of Aer Compliance, and Jacob Hirshman, a former advisor to the stablecoin company Circle, while Mike Hagedorn, senior executive vice-president at Valley National Bank, will serve as president. Notably, the founders, including Luckey and Lonsdale, are expected to remain investors rather than day-to-day operators.
Erebor’s name draws inspiration from J.R.R. Tolkien’s *Lord of the Rings*, symbolizing the reclamation of value and opportunity, much like the mountain Erebor’s treasures in the fantasy saga. The bank is positioned to support a broad client base, including U.S. startups, international companies seeking access to U.S. banking, and individuals involved in these innovative industries.
With a recent merger involving Luckey’s stablecoin startup Atticus, which raised $250 million at a $2.25 billion valuation, Erebor is poised to offer continuous banking services even during traditional bank holidays, catering to the fast-paced needs of tech startups and crypto ventures. This strategic move highlights Erebor’s commitment to reviving and modernizing tech banking by integrating digital currency solutions with traditional financial infrastructure.
In summary, Erebor represents a significant step toward rebuilding specialized banking services for the technology and crypto sectors, backed by some of the most influential figures in the tech investment world, aiming to restore confidence and capital access for startups navigating a challenging financial landscape.
