US tech bank Erebor seeks $8bn valuation as deposits quadruple
Palmer Luckey’s US bank Erebor is pursuing an $8bn valuation after quadrupling deposits in three months, a rapid rise that underscores how Washington’s fusion of defence tech and crypto finance is outpacing European lenders.
Erebor, a US bank founded by Anduril’s Palmer Luckey and backed by Peter Thiel, is in early talks to raise funds at an $8bn valuation. The figure would roughly double the $4.35bn valuation it secured late last year. The company declined to comment on the discussions.
The valuation pitch is underpinned by explosive deposit growth. Between late March and today, the bank’s deposit base surged from $1.1bn to $4.05bn, adding nearly 400 customers in three months. Erebor expects to turn a profit by the end of the year, a swift trajectory for an institution that only won its national charter in February.
Erebor is absorbing the customers left stranded by the 2023 collapse of Silicon Valley Bank. For European lenders, this rapid consolidation of US tech and defence capital underscores a widening competitive gap. While European banks struggle to attract premium tech valuations, US rivals are successfully carving out lucrative niches at the intersection of government defence spending and digital assets.
The bank targets defence manufacturers and hard-tech firms. Luckey describes these clients as the companies “rebuilding America’s industrial base,” utilising Erebor for equipment loans, venture debt, and stablecoin payments. “Zero percent of Erebor’s deposit growth this quarter has come from my own companies,” Luckey said, attributing the rise to new clients.
While crypto-backed lending has drawn less demand than anticipated, stablecoin infrastructure remains central to the bank's appeal. This blend of military-industrial finance and crypto creates a banking model that European regulators, still finalising their own digital asset frameworks, have not yet replicated.
The bank's speed has attracted political scrutiny. It was the first to receive a national charter under President Trump’s second term, prompting Senator Elizabeth Warren to raise “serious concerns” about whether political ties accelerated the process. Its investor base—Founders Fund, Andreessen Horowitz, 8VC and Lux Capital—mirrors the tightening relationship between Silicon Valley and Washington.
Erebor is also expanding into riskier territory. It has signed a preliminary deal to provide correspondent banking for Banco de Venezuela, a foothold in a nation still subject to US sanctions. Luckey is also reportedly an angel backer of a new US perpetual-futures exchange. For European investors and policymakers, Erebor’s ascent is a clear signal of how quickly US tech finance is mobilising.
