Erebor, a newly formed banking startup co-founded by Anduril CEO Palmer Luckey, has secured $350 million in fresh funding at a valuation of $4.35 billion, according to a report published Monday by Axios. The funding milestone follows a major regulatory step for the company: approval from the Federal Deposit Insurance Corporation to move forward as a nationally chartered bank.
The investment round was led by Lux Capital, Axios reported, citing people familiar with the deal. Erebor’s existing investors include several well-known names in the venture capital world, such as Peter Thiel’s Founders Fund, 8VC, and Haun Ventures.
Founded in 2025 by Luckey and entrepreneur Joe Lonsdale, Erebor positions itself at the intersection of traditional finance and emerging technologies. The company’s name continues a pattern seen in other ventures linked to Thiel, drawing inspiration from J.R.R. Tolkien’s “The Lord of the Rings.” Erebor is the name of the fictional Lonely Mountain, a symbol of wealth and industry in the novels.
FDIC approval marks a significant moment for the startup. Gaining deposit insurance is a critical step for any bank seeking to operate in the United States, and it allows Erebor to accept insured deposits once it launches. Axios reported that the bank is expected to begin operations next year.
In its application materials, Erebor outlined plans to offer a mix of conventional banking services alongside products tied to digital assets. This includes services aimed at companies working with virtual currencies, as well as businesses operating in sectors such as artificial intelligence, defense, advanced manufacturing, and financial technology.
“The target market for the Bank comprises businesses that are part of the United States innovation economy,” Erebor stated in its application, pointing to technology firms, payment service providers, investment funds, and trading firms as core clients.
The Financial Times reported in October that Erebor’s application did not receive any preferential treatment during the approval process, despite the founders’ long-standing connections to former President Donald Trump. Luckey, Lonsdale, and Thiel are all prominent figures in Silicon Valley and have been associated with policy discussions around technology, defense, and innovation.
Luckey, who previously worked at Facebook before founding defense technology company Anduril, brings experience operating at the intersection of government, technology, and private capital. Lonsdale is also a well-known entrepreneur and investor, having co-founded Palantir Technologies and venture firm 8VC.
Erebor enters a banking landscape that has seen increased scrutiny of institutions serving crypto and technology-focused clients, particularly following market volatility and regulatory tightening in recent years. By pursuing a national bank charter and FDIC insurance, the company appears to be positioning itself as a regulated alternative for innovation-driven businesses seeking specialized financial services.
As Erebor prepares for its expected launch next year, its combination of high-profile founders, substantial backing, and regulatory approval places it among the most closely watched new entrants in U.S. banking. Whether it can successfully balance traditional banking with crypto-related offerings will be a key test as it moves from planning to execution.
