trending
A cohort of prominent tech investors is preparing to launch Erebor, a new US bank designed to serve the innovation economy in the wake of Silicon Valley Bank’s collapse.
The venture, named after the treasure-laden mountain from J.R.R. Tolkien’s The Lord of the Rings, is backed by Peter Thiel’s Founders Fund, alongside tech billionaires Palmer Luckey and Joe Lonsdale.
Erebor
Tech billionaires back Erebor
Erebor intends to position itself as the go-to banking partner for risk-oriented technology start-ups, cryptocurrency businesses, and defence-focused innovators often underserved by traditional financial institutions.
Its founders include Luckey, co-founder of defence technology group Anduril, and Lonsdale, co-founder of Palantir and founder of 8VC. Both were significant donors to Donald Trump’s 2024 presidential campaign.
According to its filing for a US national bank charter, Erebor aims to provide conventional banking services while also offering virtual currency products.
It will target businesses developing artificial intelligence, digital assets, defence technologies, and manufacturing innovation, alongside the individuals employed in or investing in such sectors.
The bank also plans to facilitate services for non-US companies seeking access to the US banking system.
Silicon Valley Bank
The initiative was conceived following Silicon Valley Bank’s failure in 2023, which left a void in specialised banking services for early-stage tech companies.
While SVB’s assets were acquired by First Citizens and some bankers moved to HSBC, many venture-backed start-ups have struggled to access the credit facilities previously available to them.
Erebor will focus particularly on stablecoins, aiming to become “the most regulated entity conducting and facilitating stablecoin transactions,” as stated in its charter application.
Operational leadership will be overseen by co-CEOs Jacob Hirshman, formerly of crypto firm Circle, and Owen Rapaport, CEO of Aer Compliance.
Banking veteran Mike Hagedorn will serve as president.
Headquartered in Columbus, Ohio, with an additional office in New York, Erebor will operate as a digital-first bank, delivering services entirely via its mobile app and website.
As traditional banks remain cautious around high-risk and crypto-related firms, Erebor’s backers see an opportunity to build a financial institution embedded within the venture capital ecosystem, aiming to redefine start-up banking for the next technological era.
Comments