Palmer Luckey launches crypto bank Erebor with backing from Palantir’s Joe Lonsdale

Silicon Valley’s startup scene lost a major financial lifeline when Silicon Valley Bank collapsed in March 2023. Now, a new venture is stepping in to fill the gap—and it’s backed by some familiar names in tech.

Palmer Luckey, co-founder of defense tech company Anduril and founder of Oculus, is launching a new digital bank called Erebor. The bank aims to support high-risk tech sectors like crypto, AI, defense, and advanced manufacturing industries that traditional banks often shy away from.

Joe Lonsdale, co-founder of Palantir, confirmed in a statement to Reuters that he’s a “proud investor” in the project. Erebor is applying for a national bank charter and plans to operate primarily online, with a headquarters in Columbus, Ohio, and a secondary office in New York.

“Tech billionaire Joe Lonsdale said on Wednesday he is investing in a new crypto-focused U.S. bank being launched by Anduril co-founder Palmer Luckey that aims to fill the void left by Silicon Valley Bank’s collapse,” Reuters reported.

Tech Billionaires to Launch Erebor, a Crypto-Focused Bank Aiming to Replace Silicon Valley Bank

Erebor’s mission is simple: give tech entrepreneurs and investors a place to bank without being treated like a liability. Startups faced a painful reckoning after SVB collapsed, with many scrambling to meet payroll or access capital. Erebor wants to avoid that kind of panic by offering banking services tailored to the tech crowd.

The bank’s name is a nod to J.R.R. Tolkien’s “The Lord of the Rings.” Erebor, the Lonely Mountain, was a fortress reclaimed from a dragon—an apt metaphor for a sector trying to recover its financial stronghold.

The founding team includes Owen Rapaport and Jacob Hirshman, who previously advised Circle, a company known for its work on stablecoins. According to Erebor’s charter application, the bank plans to hold stablecoins on its balance sheet—a bold move in a regulatory environment that’s still feeling its way around digital assets.

The team says Erebor aims to be “the most regulated entity conducting and facilitating stablecoin transactions.” That might sound ambitious, but it reflects the broader shift among fintechs and banks who are leaning into stablecoins to speed up cross-border payments and reduce settlement friction.

Peter Thiel’s Founders Fund is also backing the venture, according to the Financial Times, which first reported the news. Luckey and Lonsdale won’t be involved in day-to-day operations, but their involvement adds weight to a project that could redefine how tech startups handle their money.

Berlin, Germany, March 19, 2014. Hy! Summit – Image by Dan Taylor. www.heisenbergmedia.com