Erebor Bank seeks new funding at $8 billion valuation as deposits surge

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Erebor Bank seeks $8B funding

Highlights

Erebor Bank seeks to raise new funding at a valuation of at least $8 billion, up sharply from $4.35 billion in December’s $350 million round.
Deposits at Erebor Bank surge to $4.05 billion—nearly quadrupling since March—while customer count grows by nearly 400 in the past three months.
Erebor secures final approval for its national bank charter in February and faces political scrutiny over the charter process and regulatory relationships.

Funding talks and operating expansion

As reported by The Block, citing Bloomberg, Erebor Bank is in preliminary talks to raise funding at a valuation of at least $8 billion, citing people familiar with the matter. That would mark a sharp increase from the $4.35 billion valuation attached to its $350 million funding round in December, although the discussions remain early and the final valuation is still under debate.

The startup, founded by Palmer Luckey and backed by Peter Thiel, has nearly quadrupled deposits since March to $4.05 billion from the $1.1 billion it disclosed to regulators at the end of that month. It also adds nearly 400 customers over the past three months and expects to be profitable by the end of the year.

Luckey says none of the bank's deposit growth this quarter comes from his own companies and that hundreds of new customers choose Erebor independently. The bank plans to offer U.S. dollar stablecoin deposits and payments, though demand for crypto-backed lending is lower than it initially expects, one source says.

Charter progress and regulatory scrutiny

Erebor receives preliminary approval from the Office of the Comptroller of the Currency in October 2025 and then secures final approval to operate as a national bank in February. The charter is described as the first new national bank charter granted under the Trump administration.

The bank also signs a non-binding letter of intent with Banco de Venezuela to provide correspondent banking services. Bloomberg says such an arrangement would ease foreign exchange flows into the sanctioned country and create a channel for transactions with the U.S.

Erebor's rapid rise is drawing political scrutiny as well. Sen. Elizabeth Warren reportedly says she has serious concerns about how quickly the bank secured its charter and questions whether political ties in the Trump administration help accelerate the process.

Our earlier article on UBS’s plan to expand its U.S. offering covered how the bank is preparing to pilot everyday banking products with employees, ahead of a broader rollout for wealthy clients from mid-2027. We noted that securing a national banking licence is central to the strategy, enabling UBS to pair checking and savings accounts and lending with investment advice as it competes more directly with major U.S. wealth managers.

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