Erebor Bank Rakes in $3 Billion in Deposits in First Year
Palmer Luckey’s Erebor Bank has achieved a remarkable milestone in its first year of operation, pulling in over $3 billion in deposits in just one quarter. The bank, which opened in February 2026, has quickly become a favorite among startups that traditional banks often overlook. By mid-year, Erebor’s deposits surged from $1.1 billion in March to an estimated $4.05 billion to $4.6 billion, with over 500 new clients joining during the quarter.
The bank’s revenue has also seen a significant boost, climbing from approximately $31 million in March to $112 million by July, according to research firm Sacra. Investors have taken notice, with Erebor reportedly in funding discussions targeting an $8 billion valuation, nearly doubling its prior valuation of $4.35 billion.
Erebor positions itself as a niche lender for the innovation economy, focusing on capital-intensive companies in AI, defense technology, and advanced manufacturing. The bank offers equipment financing and venture debt, allowing startups backed by venture capital to extend their runway without giving up more equity. Backed by Founders Fund, 8VC, and Haun Ventures, Erebor operates as a federally chartered national bank out of Columbus, Ohio, with FDIC-insured accounts.
The bank also supports stablecoins for deposits and payments, aligning with its crypto-friendly approach. Erebor’s origin story traces back to the 2023 collapse of Silicon Valley Bank, which exposed the vulnerabilities of the startup ecosystem’s reliance on a single institution. Luckey, co-founder of Anduril, aimed to address these financing headaches for hardware-heavy businesses.
Despite its rapid growth, Erebor faces risks similar to those that plagued Silicon Valley Bank, including the concentration of deposits among startups in related sectors. The next key markers to watch include the outcome of the reported funding round, whether revenue continues to track Sacra’s estimates, and whether Erebor can achieve profitability by year-end.