Palmer Luckey is making another big bet: this time, not in virtual reality or military defense, but digital finance. The Anduril CEO and Oculus founder has launched Erebor, a digital bank that already holds a valuation of $2 billion as it raises at least $225 million in funding, Business Insider reports.
Venture firms Founders Fund and 8VC, led by Peter Thiel and Joe Lonsdale, respectively, are backing the project, according to sources with knowledge of the deal who spoke with Business Insider. The fundraising remains in progress, and details could still change, but the size of the round and the players involved have already drawn attention across Silicon Valley.
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Erebor's Tolkien Name Isn't Just for Show
Erebor takes its name from J.R.R. Tolkien's "The Lord of the Rings," where the Lonely Mountain is described as a place of treasure and power, Business Insider says. That symbolism may not be coincidental, as Luckey has a track record of blending fantasy themes with serious business. His earlier startup, Anduril, shares the name of a legendary sword from the same fantasy universe.
Erebor has applied for a U.S. bank charter that would allow it to operate as a regulated institution, according to internal documents reviewed by Business Insider. The bank plans to offer crypto-collateralized loans and other services tailored to startups and digital asset companies.
Jacob Hirshman, who previously worked at stablecoin issuer Circle, and Owen Rapaport, co-founder of Aer Compliance, will lead Erebor as co-CEOs, Business Insider reports. Mike Hagedorn, the former CFO of Valley National Bank, lists his current role as Erebor president on LinkedIn.
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Trump's Crypto Pivot Aligns With Erebor's Rise
Erebor's launch comes as the Trump administration takes a more favorable stance on the cryptocurrency sector. In recent months, President Donald Trump has endorsed creating a strategic bitcoin reserve.
Trump also appointed venture capitalist David Sacks as the country's first crypto czar, tasking him with developing a legal framework to provide long-sought clarity for the cryptocurrency industry and leading the Presidential Council of Advisors for Science and Technology.
The venture firms funding Erebor have clear political ties to Trump. Peter Thiel donated over $1 million to pro-Trump super PACs during the 2016 election, according to CNN. Lonsdale, co-founder of Palantir PLTR, has also supported America Pac, a group that backed Trump's 2024 re-election campaign, Financial Times reported.
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From Oculus to Anduril to Erebor, Palmer Luckey Keeps Building Billion-Dollar Systems
Luckey founded Oculus at age 19 and sold the VR company to Facebook, now Meta META, for $2 billion just two years later. Business Insider says that after leaving Meta in 2016 following controversy over a $10,000 donation to a pro-Trump meme group, Luckey co-founded Anduril, which reached a $30.5 billion valuation in June 2023 after raising $2.5 billion.
Although Meta and CEO Mark Zuckerberg denied politics played a role in Luckey's exit, Business Insider says the two have since reconnected through a military tech collaboration announced earlier this year.
Following Circle's CRCL recent public market debut, with shares up over 113% since listing, Erebor's launch enters a crypto sector already drawing heightened institutional interest.
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