Tech billionaire Joe Lonsdale, co-founder of Palantir, announced his investment in Erebor, a new U.S. digital-only bank founded by Palmer Luckey, co-founder of defense tech company Anduril. Erebor aims to fill the gap left by Silicon Valley Bank’s collapse in March 2023, which severely impacted startups and venture capital firms dependent on SVB’s services.
Erebor has applied for a national bank charter and plans to serve tech companies across sectors like artificial intelligence, cryptocurrency, defense, and manufacturing, as well as individuals connected to these industries. The bank’s name, drawn from Tolkien’s The Lord of the Rings, references the Lonely Mountain fortress known for reclaiming treasure.
Headquartered in Columbus, Ohio, with a secondary office in New York, Erebor intends to operate with a digital-first approach. Leadership includes Owen Rapaport and Jacob Hirshman, a former advisor to stablecoin company Circle.
The bank plans to hold stablecoins—a crypto asset class pegged to fiat currencies—to facilitate faster cross-border payments and digital financial services. Erebor aims to become “the most regulated entity conducting and facilitating stablecoin transactions,” signaling its focus on compliance in the evolving crypto banking space.
Besides Lonsdale, Erebor’s backers reportedly include Peter Thiel’s Founders Fund. Neither Luckey nor Lonsdale are expected to be involved in daily operations.