Erebor bank nears $1.5 billion funding round at $8 billion valuation

Erebor, a bank backed by prominent Silicon Valley investors and founded by Anduril founder Palmer Luckey, is nearing a $1.5 billion funding round at an $8 billion valuation, according to people familiar with the matter.

The valuation would be calculated before the new capital is added and would represent a sharp increase from the $4.35 billion valuation Erebor secured in a funding round earlier this year.

Investors expected to participate include Lux Capital, Human Capital, Valor Equity Partners, Andreessen Horowitz and SV Angel, according to the report. Existing backers including 8VC and Haun Ventures are also expected to participate.

The round has attracted strong investor demand and could close within the coming weeks.

Erebor was created following the 2023 collapse of Silicon Valley Bank, which had served as an important financial institution for technology startups and venture capital firms.

The company received final regulatory approval to operate as a bank in February. Since then, deposits have climbed to $4.6 billion through the end of July, according to a person familiar with the figures.

Erebor has also surpassed $100 million in annualized recurring revenue.

The bank is targeting companies across what it calls the US innovation economy, with a focus on businesses involved in virtual currencies, artificial intelligence, defense and manufacturing. It also plans to serve individuals who work for or invest in those companies.

Erebor has already provided financing to businesses in capital intensive sectors, including nuclear energy startup Valar Atomics.

The bank has also added former US official Michael Mosier and former American Express executive Anré Williams to its board.

Luckey founded Erebor alongside Owen Rapaport, Jacob Hirshman, Trevor Capozza and Aaron Pelz. The bank is headquartered in Columbus, Ohio.

The company takes its name from Erebor, the Lonely Mountain featured in JRR Tolkien’s The Hobbit.