Palmer Luckey’s New Bank Soars to $4.35 Billion Valuation After Securing FDIC Green Light

FDIC approval triggers a multi-billion dollar valuation surge for the tech mogul's financial venture.

The Regulatory Nod That Unlocked Billions

Securing a green light from the Federal Deposit Insurance Corporation isn't just a regulatory checkbox—it's a value multiplier. For Palmer Luckey's new banking enterprise, that stamp of approval translated directly into a staggering $4.35 billion valuation. The market's response highlights how traditional regulatory milestones still dictate modern financial worth, even for ventures led by tech disruptors.

Building Trust in a Skeptical System

The FDIC's backing does more than insure deposits—it builds a bridge of trust with a mainstream audience still wary of fintech innovations. This move bypasses years of credibility-building, instantly positioning the bank within the protected perimeter of the established financial system. It's a masterclass in using old rules to enable new ambitions.

The Valuation Catalyst

That $4.35 billion figure isn't just a number—it's a signal. It represents investor confidence that this hybrid model can navigate the complex intersection of innovative technology and stringent financial regulation. The valuation surge following regulatory approval proves that in finance, sometimes the most disruptive move is playing by the book—or at least getting the rulebook's guardians on your side.

Another day, another financial unicorn born not from market disruption but from regulatory permission—because nothing says innovation like a government stamp of approval.

TLDR

• Erebor, co-founded by Anduril CEO Palmer Luckey, raised $350 million at a $4.35 billion valuation with Lux Capital leading the round
• The FDIC approved Erebor’s deposit insurance application last week, moving the company closer to becoming a chartered national bank
• Erebor plans to serve technology companies focused on crypto, AI, defense, and manufacturing sectors
• The company emerged in 2025 as a response to banking gaps left after Silicon Valley Bank’s collapse in 2023
• Existing backers include Peter Thiel’s Founders Fund, 8VC, and Haun Ventures

Erebor, a new banking startup co-founded by Palmer Luckey, has raised $350 million at a $4.35 billion valuation. Lux Capital led the funding round, according to sources cited by Axios.

The fundraising comes after the Federal Deposit Insurance Corporation approved Erebor’s deposit insurance application last week. This approval marks a key step toward establishing Erebor as a newly chartered national bank.

Palmer Luckey on Erebor, his new bank just valued at over $4B:

"We'll have the most conservative loan-to-deposit ratios of any bank in history."

"I'm not a finance bro. I want something like Erebor to exist because of and for the sake of my love for these other technologies." pic.twitter.com/0dX7d5ER6b

— TBPN (@tbpn) December 22, 2025

Luckey, who serves as CEO of defense contractor Anduril, founded Erebor in 2025 alongside Joe Lonsdale. The company has backing from Peter Thiel’s Founders Fund, 8VC, and Haun Ventures.

Erebor launched in response to banking sector gaps that appeared after Silicon Valley Bank collapsed in March 2023. SVB had been the primary banking partner for many venture-backed technology companies before its failure.

The bank failure occurred after rapid interest rate hikes eroded the value of SVB’s long-term securities. A depositor run followed, leading to one of the largest bank failures since the 2008 financial crisis.

Target Market and Services

Erebor plans to provide both traditional banking and crypto-related products and services. The company outlined its target market in its banking application to regulators.

“The target market for the Bank comprises businesses that are part of the United States innovation economy, in particular technology companies focused on VIRTUAL currencies, artificial intelligence, defense, and manufacturing, as well as payment service providers, investment funds and trading firms,” Erebor stated in its application.

Luckey previously founded Oculus VR, the virtual reality headset company that Facebook acquired. He later co-founded Anduril Industries, where he currently serves as CEO.

The company’s name follows a pattern seen in other projects associated with Thiel. Erebor is named after a mountain in J.R.R. Tolkien’s “The Lord of the Rings” book series.

Regulatory Progress and Timeline

Erebor received preliminary conditional approval from the Office of the Comptroller of the Currency earlier this year. This represents another regulatory hurdle cleared on the path to becoming a fully licensed bank.

The FDIC’s deposit insurance approval remains valid for 12 months. The approval will expire if Erebor is not formally established or if the FDIC does not grant an extension.

Axios reported that Erebor will likely launch next year. The Financial Times reported in October that Erebor’s application did not receive special treatment from the TRUMP administration.

This occurred despite the longstanding ties between the Trump administration and Luckey, Lonsdale, and Thiel. The regulatory process followed standard procedures for new bank charters.

Erebor joins other companies entering the digital asset banking space. Coinbase, Circle, and Ripple Labs have sought national trust charters or similar approvals from the OCC.

David Sacks, who serves as the crypto and AI czar under President Trump, wrote Monday that the SEC and CFTC are expected to issue clear regulatory guidelines for cryptocurrencies. The FDIC deposit insurance approval was granted last week.