Palmer Luckey-backed digital bank Erebor has reached a $4.35 billion valuation after raising $350 million in a funding round led by Lux Capital.
The latest raise attracted both new investors and existing backers, including Founders Fund, Haun Ventures and 8VC.
Erebor is also backed by billionaire investor Peter Thiel, underscoring strong confidence from prominent technology financiers.
The valuation milestone comes as US regulators move closer to granting Erebor a full national bank charter.
Erebor recently received preliminary conditional approval from the Office of the Comptroller of the Currency.
The Federal Deposit Insurance Corporation has also approved the bank’s deposit insurance application for a 12-month period.
The FDIC approval will expire unless Erebor is formally established or granted an extension within that timeframe.
Erebor emerged from stealth in mid-2025 to address banking gaps affecting startups, crypto firms and AI-focused companies.
These gaps widened following the collapse of Silicon Valley Bank in March 2023 after rapid interest-rate hikes.
Silicon Valley Bank’s failure marked one of the largest US bank collapses since the 2008 financial crisis.
Erebor aims to combine traditional banking services with digital asset and stablecoin-friendly infrastructure.
Similar charter ambitions have been pursued by firms such as Coinbase, Circle and Ripple Labs.
The push aligns with renewed regulatory momentum in the United States following recent developments in crypto legislation.