Palmer Luckey’s Erebor Bank Hits $4.35bn Valuation After $350m Raise

Erebor, a banking startup co-founded by Anduril CEO Palmer Luckey, has raised US$350 million (AU$535.5 million) at a US$4.35 billion (AU$6.65 billion) valuation, Axios reported Monday.

According to the report, the funding follows a key regulatory step. Axios said the FDIC approved Erebor’s deposit insurance application last week, a requirement for a new national bank to take insured deposits under US banking rules.

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No Special Treatment For Erebor

Axios reported Lux Capital led the round, citing anonymous sources. Erebor’s existing backers include Founders Fund, 8VC, and Haun Ventures.

Erebor was founded in 2025 by Luckey and Joe Lonsdale, with backing from Peter Thiel-linked investors. The company name references a mountain from The Lord of the Rings, according to Axios.

In its banking application, Erebor said it plans to offer traditional banking as well as crypto-related products and services. It said it is targeting firms in the U.S. “innovation economy,” including companies focused on virtual currencies, AI, defense, and manufacturing, plus payment providers, investment funds, and trading firms.

Axios said 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, despite the founders’ and backers’ political ties. But that should be normal by now. Even the Cardano co-founder said Trump’s involvement in crypto has created “political and reputational risks” that the industry has been unwilling to confront.

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