Anduril CEO Palmer Luckey's new digital banking startup set to be valued at $2 billion, sources say

Palmer Luckey, co-founder and CEO of Anduril Industries, is venturing into the digital banking space with a new startup named Erebor, inspired by J.R.R. Tolkien's 'The Lord of the Rings.' This innovative digital bank, targeting startups and cryptocurrency firms, is set to raise a minimum of $225 million, reportedly valuing the company at an impressive $2 billion. The funding round is backed by notable venture firms, including Founders Fund, led by Peter Thiel, and 8VC, directed by Joe Lonsdale, both of whom are also co-founders of Palantir. The fundraising process is still in progress, and specifics may evolve. As of now, neither Luckey, 8VC, nor Founders Fund have provided comments regarding the initiative. Erebor, similar to Luckey’s Anduril and Thiel’s Palantir, takes its name from the legendary kingdom known for its treasures. The startup has recently sought a U.S. bank charter, aiming to operate as a regulated financial institution. Its services will include crypto-collateralized lending, targeting both startups and clients in the cryptocurrency space. At the helm of Erebor will be co-CEOs Jacob Hirshman, formerly with stablecoin issuer Circle, and Owen Rapaport, who co-founded the now-acquired crypto monitoring company Aer Compliance. Mike Hagedorn, who has extensive experience as a senior executive at Valley National Bank, will serve as the bank's president. Luckey, who previously gained fame for founding Oculus and later sold it to Facebook for $2 billion, is also the driving force behind Anduril, a defense technology company that raised $2.5 billion at a staggering $30.5 billion valuation in June. His journey has not been without controversy, including his exit from Meta following a political donation in 2016. Nonetheless, Luckey’s new venture into digital banking comes at a time when interest in cryptocurrency is surging, especially following Circle's recent IPO, with shares seeing a significant rise since then.