Erebor, a digital banking startup co-founded by Palmer Luckey and Joe Lonsdale, has closed a $350 million funding round that values the company at approximately $4.35 billion. This significant capital injection comes just days after the Federal Deposit Insurance Corporation (FDIC) approved the bank's deposit insurance application, a critical regulatory milestone required to operate as a national bank in the United States.
The funding round was led by Lux Capital and included participation from both new investors and existing backers such as Peter Thiel's Founders Fund, 8VC, and Haun Ventures. Founded in 2025, Erebor plans to launch its operations next year.
The speed of the regulatory process was notable, with the entity receiving conditional approval from federal regulators just four months after submitting its application, followed by FDIC clearance to accept deposits. This rapid approval clarified the project's regulatory risk profile and enabled a valuation that market observers might have considered premature for a bank not yet in active operation.
In its official application, Erebor outlined its target market: "businesses that are part of the United States innovation economy, in particular technology companies focused on virtual currencies, artificial intelligence, defense, and manufacturing, as well as payment service providers, investment funds and trading firms." The bank's business plan combines traditional banking services with products specifically linked to the cryptocurrency ecosystem, aiming to provide payments, custody, and other regulated financial services.
Erebor aims to address a significant bottleneck in the U.S. financial landscape by offering a full banking structure to crypto and tech companies, rather than operating as a hybrid intermediary. Stable access to banking accounts, payments, and custody has been a persistent challenge for crypto firms in the country. The Financial Times reported in October that, despite the founders' political connections to former President Trump, Erebor's application did not receive preferential treatment and was approved based on technical criteria alone.
While not yet launched, the market has assigned Erebor a specific role. Its regulatory backing, substantial valuation, and targeted service scope reflect high expectations for its potential to bridge the gap between traditional finance and the growing digital asset sector.
