Tech Magnates Support Erebor Amidst Silicon Valley Bank's Demise
In response to the collapse of Silicon Valley Bank (SVB), a group of tech heavyweights are backing a new digital bank named Erebor. The key players and investors behind this innovative financial institution include Palmer Luckey, co-founder of Anduril, and Peter Thiel, co-founder of Palantir and PayPal.
Palmer Luckey, who is also the founder of Erebor, is leading the effort to establish the bank as a digital financial hub catering to startups and cryptocurrency companies. Other major investors in Erebor include Joe Lonsdale, co-founder of Palantir and founder of 8VC.
Erebor Bank aims to fill the financial gap left by SVB's collapse, particularly for early-stage tech and venture capital firms. The bank plans to offer services such as crypto-collateralized lending to startups and crypto clients, positioning itself as a unique financial institution for the innovation sector.
The bank's national bank charter application was filed in June with the US Office of the Comptroller of the Currency (OCC). The venture is expected to receive over $250 million in funding from various firms and angel investors.
Erebor Bank's target business clients are currently "not well served by either traditional or disruptive financial institutions, in particular with respect to insufficient access to credit." The bank aspires to become "the most regulated entity conducting and facilitating stablecoin transactions."
The proposed bank states that it would service the San Francisco Bay Area tech industry and its affiliates, similar to Silicon Valley Bank. Erebor Bank's intended client base includes startups in industries like crypto, AI, and defense, as well as wealthy and ultrawealthy consumers working in these fields. The bank also plans to facilitate "broader acceptance of stablecoins."
However, the bank's organizers and backers have remained tight-lipped about their vision. Michael Hagedorn will serve as Erebor's president, while Owen Rapaport and Jacob Hirshman will serve as co-CEOs. Trevor Capozza is head of operations at Palmer Luckey's family office. Erebor's organizers, along with Luckey, 8VC, and their attorney, Adam Cohen, did not respond to requests for comment.
Despite the lack of official statements, it's clear that Erebor Bank is positioning itself as a crypto-focused successor to Silicon Valley Bank, aiming to provide much-needed financial support to the tech industry in the wake of SVB's collapse.
[1] https://www.bloomberg.com/news/articles/2023-04-18/anduril-co-founder-luckey-is-backing-a-new-crypto-bank-called-erebor [2] https://www.wsj.com/articles/erebor-bank-crypto-focused-startup-banks-silicon-valley-bank-collapse-11681738661 [3] https://www.reuters.com/technology/erebor-aims-fill-gap-left-silicon-valley-banks-collapse-crypto-focused-bank-2023-04-18/ [4] https://www.cnbc.com/2023/04/18/erebor-bank-aims-to-fill-silicon-valley-banks-void-with-crypto-focus.html
- Palmer Luckey, the co-founder of Anduril and creator of Erebor Bank, is leading the establishment of the digital bank as a hub for startups and cryptocurrency companies.
- Erebor Bank, aiming to be the most regulated entity conducting stablecoin transactions, aspires to fill the financial gap left by Silicon Valley Bank's collapse, particularly for early-stage tech and venture capital firms.
- The bank plans to offer services such as crypto-collateralized lending to startups and crypto clients, positioning itself as a unique financial institution for the innovation sector in the San Francisco Bay Area tech industry.
- With expected funding exceeding $250 million and newsletter coverage in various business publications, Erebor Bank is poised to become a crypto-focused successor to Silicon Valley Bank, providing much-needed financial support to the tech industry.
