Palmer Luckey, the 32-year-old founder of defense firm Anduril, is backing a new crypto-friendly banking startup tentatively called ‘Erebor’. The venture aims to provide stability for Silicon Valley tech entrepreneurs by offering deposits in stablecoin, a digital currency pegged to stable assets like the US dollar or gold. Luckey is partnering with tech investor Joe Lonsdale, whose venture firm 8VC is leading a $225 million fundraising round to meet federal regulatory requirements for launching a bank. The startup’s plans are still in early stages, and the name ‘Erebor’ is not final. The venture is a response to the collapse of Silicon Valley Bank in 2023, which highlighted the need for more stable banking options for tech startups. Erebor aims to offer constant service even during bank holidays by handling deposits in stablecoin. The startup is also exploring alternative banking practices, such as maintaining a conservative balance sheet and potentially imposing a maximum loan-to-debt ratio of 50%. One concept under consideration is offering bank accounts with one-to-one deposits, where assets are kept untouched. Luckey’s involvement in Erebor marks another venture for the tech mogul, who is known for creating the Oculus VR headset and recently ending his feud with Meta’s Mark Zuckerberg. Their companies are set to collaborate on developing AI-powered augmented reality and virtual reality devices for the US military.
The startup’s focus on stablecoin deposits and conservative banking practices is seen as a response to the recent instability in the banking sector. With the GENIUS Act nearing passage in Congress, which would establish a regulatory framework for stablecoins, Erebor is positioning itself to take advantage of the emerging regulatory environment. Joe Lonsdale, who will take a board seat at Erebor, is also backing the venture. While Luckey is a cofounder, he is not expected to hold an executive role or be involved in day-to-day operations. The partners have yet to set a date to start operations, and the plans are still subject to change.
Anduril, Luckey’s defense firm, has recently secured a $30.5 billion valuation, demonstrating Luckey’s ability to build successful and valuable companies. The collaboration between Meta and Anduril on AI-powered AR and VR devices for the US military marks a significant development in the tech industry. As Erebor moves forward, it will be interesting to see how the startup navigates the complex regulatory environment and establishes itself as a major player in the banking sector.
