Erebor set to raise $1.5bn as defense lending drives its growth
The digital-asset bank is growing on equipment finance and venture debt for defense manufacturers, and its charter is under Senate investigation.
The digital-asset bank is growing on equipment finance and venture debt for defense manufacturers, and its charter is under Senate investigation.
Erebor is set to raise $1.5bn, the Financial Times reports. Bloomberg first disclosed the talks on July 2, citing a valuation of at least $8bn. That would roughly double the $4.35bn post-money valuation Erebor reached in December 2025. The discussions were then early, and the bank declined to comment.
Deposits rose from $1.1bn at the end of March to about $4.05bn by midyear, according to people familiar with the figures who spoke to Bloomberg. Erebor added nearly 400 customers over the quarter. "Zero percent of Erebor's deposit growth this quarter has come from my own companies," said co-founder Palmer Luckey, who also founded the weapons manufacturer Anduril.
Luckey traced much of that growth to hard-tech and defense manufacturers "rebuilding America's industrial base." Erebor lends against their equipment and writes venture debt. Demand for its crypto-backed lending has fallen short of expectations. A bank chartered around digital assets is growing on credit for physical production.
Defense-tech startups raised more than $14.6bn in venture funding in 2026, past the record $9.6bn raised in all of 2025, by a Value Add Pulse tally published Aug. 4. Three rounds took $8.75bn of that: Anduril's $5bn Series H, Shield AI's $2bn Series G and Saronic's $1.75bn Series D. Erebor's equipment loans target the companies below that tier. It was founded to take the customers stranded when Silicon Valley Bank collapsed in 2023.
The charter itself is contested. Sen. Elizabeth Warren, the ranking member on Senate Banking, questioned its legal legitimacy in a Feb. 25 letter demanding the unredacted application and the OCC's communications with the White House. She cited the four-month approval, the applicant lawyer's later appointment as OCC chief counsel, and Erebor's opening without a chief risk officer. An unlawfully granted charter "would have to be terminated," Warren wrote.
The OCC granted preliminary conditional approval on Oct. 15, 2025, and Erebor opened on Feb. 8, 2026. It expects to be profitable by year-end. The 12% tier 1 leverage floor runs through its first three years.
Frequently Asked Questions
What is Erebor?
A digital national bank in Columbus, Ohio, co-founded by Anduril founder Palmer Luckey and backed by Peter Thiel's Founders Fund, 8VC, Haun Ventures and Lux Capital. It lends to AI, defense, advanced manufacturing and crypto companies, and opened on Feb. 8, 2026.
How much is Erebor raising, and at what valuation?
The Financial Times reports it is set to raise $1.5bn. Bloomberg first disclosed the talks on July 2 at a valuation of at least $8bn, roughly double the $4.35bn it reached in December 2025.
Where is the deposit growth coming from?
Deposits went from $1.1bn at the end of March to about $4.05bn by midyear, with nearly 400 customers added, per Bloomberg. Luckey said none of that quarter's growth came from companies he controls, and that much of it came from hard-tech and defense manufacturers.
What does Erebor actually lend against?
Equipment finance and venture debt for manufacturers, plus deposits and payments in dollar-backed stablecoins. Luckey said demand for the bank's crypto-backed lending has come in below expectations.
Why is the bank's charter under scrutiny?
Sen. Elizabeth Warren, ranking member on Senate Banking, wrote to Comptroller Jonathan Gould on Feb. 25 questioning the charter's legal legitimacy. She cited the four-month approval, the fact that the lawyer who filed the application was later named OCC chief counsel, and the bank opening without a chief risk officer.
What conditions did the OCC attach?
Preliminary conditional approval on Oct. 15, 2025 requires Erebor to hold a minimum 12% tier 1 leverage ratio for its first three years, engage an independent external auditor and pass a pre-opening examination, per the OCC.
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Marcus Schuler
Marcus Schuler edits BattlePolicy, a daily defense-technology brief connecting the companies and capabilities behind modern war to the contest among Europe, the US, Russia, and China.