The collapse of Silicon Valley Bank has led Anduril co-founder Palmer Luckey and his Silicon Valley billionaire group to establish Erebor as a digital bank which will provide financial services to AI, crypto and defense startups.
The proposed bank Erebor has submitted a national charter application to operate as an online institution with its main office in Columbus Ohio and a secondary location in New York according to Financial Times. The leadership of the new bank will be handled by co-CEOs Owen Rapaport and Jacob Hirshman who previously advised Circle.
The bank receives its initial funding from Founders Fund which belongs to Peter Thiel and Palantir co-founder Joe Lonsdale. The bank aims to provide financial services to both companies and their employees who operate in fast-paced technology sectors that face challenges obtaining funding from conventional banking institutions. The new lender plans to maintain stablecoins which are crypto tokens linked to fiat currencies on its balance sheet to enable digital payment transactions.
The collapse of SVB in early 2023 caused numerous startups to lose their banking services. The establishment of Erebor demonstrates ongoing market requirements for financial institutions that cater to high-risk yet rapidly expanding technology businesses.
