A New Bank, Erebor, Aims to Fill the Gap Left by Silicon Valley Bank Collapse
A group of high-profile tech investors, including military tech entrepreneur Palmer Luckey and venture capitalist Joe Lonsdale, is gearing up to launch Erebor, a new bank with ambitions in cryptocurrency, defense tech, and artificial intelligence. Erebor has applied for a national banking charter in the United States, aiming to cater to the “innovation economy” – start-ups in sectors like blockchain, AI, defense, and advanced manufacturing.
Named after the “Lonely Mountain” in The Lord of the Rings, Erebor plans to serve the niche left behind by Silicon Valley Bank’s collapse in 2023. The failure of SVB led to a shortage of credit access for tech companies, prompting Erebor’s founders to step in and address the gap in banking services.
Erebor’s co-founders began discussing the idea of launching a bank after SVB’s demise in 2023, recognizing the need for a new financial institution tailored to tech start-ups and investors.
Its application describes Erebor as a national bank offering traditional and virtual currency-related products, focusing on underserved customers in the tech industry. Erebor also plans to play a significant role in stablecoin transactions, a controversial area of the cryptocurrency market.
Although Erebor will have a tech-forward approach, it will be headquartered in Columbus, Ohio, with an office in New York City. The bank will operate digitally, providing services through a smartphone app and website.
Key figures behind Erebor include founders Luckey and Lonsdale, as well as co-CEOs Jacob Hirshman and Owen Rapaport. The bank’s president will be Mike Hagedorn, a seasoned banking executive.
While much about Erebor remains confidential, the venture represents a shift in the financial services landscape within the tech sector. As traditional banks become more cautious, tech-backed firms like Erebor are stepping in to fill the void. Only time will tell if Erebor’s unique blend of services will resonate with regulators and the market.
For now, Erebor’s founders are optimistic about the opportunities that lie ahead as they embark on this new banking venture.
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