Palmer Luckey is fast-tracking his third major venture—a digital-only national bank for tech startups and the wealthy that recently received Donald Trump administration approval.
“The real bank for real Americans doing real things!” Luckey posted from Erebor Bank NA’s X account.
Erebor is reportedly launching with $635 million in capital, with a focus on cryptocurrency, and will fill a space left by the collapse of Silicon Valley Bank three years ago.
Luckey, 33, is still often mentioned as the founder of Oculus VR, a company he sold to Mark Zuckerberg’s Facebook, now Meta, for more than $2.3 billion 12 years ago.
Anduril Industries, Luckey’s second major venture, has grown from a border-protection innovator to a full-fledged Costa Mesa-based defense supplier aiming to challenge long-established military stalwarts such as RTX and Lockheed Martin.
While Luckey won’t be running Erebor, the new financial institution takes him into a whole new business world.
J.R.R. Tolkien’s ‘The Hobbit’
The bank, established last year, takes its name from the mountain where dwarves stored their treasure in J.R.R. Tolkien’s “The Hobbit.”
While multibillionaire Luckey is dead-serious about the new venture, the Wall Street Journal couldn’t help but tweak him on the name.
“Hobbit-Inspired Startup Becomes First New Bank Greenlighted by Trump 2.0,” the newspaper said in an online headline on Feb. 6.
The financial institution will operate nationwide.
Luckey told podcast interviewers for tech talk show and podcast TBPN (Technology Business Programming Network) last month that the bank will operate in a conservative, low-risk manner so that “you can ensure that you’re not going to go out of business.”
“You’re not going to force everyone to rely on government bailouts,” he continued. “You may not be able to survive a total financial collapse. Banks rarely can. But at least you can be the last man standing.”
News site Axios said in December that Erebor had a valuation of over $4 billion.
Peter Thiel, Joe Lonsdale
The Tolkien books have also inspired the name Anduril, as well as Palantir Technologies Inc., the software company founded by Peter Thiel, which has close ties to the Pentagon. Anduril is a legendary sword used to fight evil, while Thiel’s company is referencing the palantíri, or “all-knowing” stones, from Tolkien’s “The Lord of the Rings.”
Both Thiel and fellow billionaire Joe Lonsdale have reportedly invested in Luckey’s Erebor. All three men have ties to President Trump. Luckey was one of the tech industry’s early Trump supporters.
Erebor, which means Lonely Mountain, received fast-track approval for the bank venture.
Exactly when Erebor will be up and running has not been disclosed. Its LinkedIn page indicates it has 34 employees.
The Office of the Comptroller of the Currency, which oversees national bank charters, confirmed the approval of Erebor’s charter in early February.
Luckey is listed as Erebor’s principal shareholder and a member of its board of directors.
Base in Columbus
The bank will be headquartered in Columbus, Ohio, near the sprawling Arsenal-1 factory that Anduril is building in the Buckeye state.
“Ohio business leaders hope the bank will help draw more companies to the region as Intel and Anduril build their new factories,” NPR station WOSU in Columbus reported in July.
Erebor is expected to have a secondary office in New York City.
According to the charter application, the bank will be led by co-CEOs Owen Rapaport, the co-founder and CEO of digital assets software company Aer Compliance, and Jacob Hirshman, a former counsel to stablecoin company Circle.
Erebor is also planning to hold stablecoins, a type of cryptocurrency pegged to another asset such as the U.S. dollar, on its balance sheet. Stablecoins are designed to maintain a steady value backed by reserves.
From Sunny SoCal to Chilly Midwest
Palmer Luckey is definitely the quintessential Southern California guy with his love of Orange County and constantly noted sun ‘n fun cargo shorts and Hawaiian shirts.
Yet, two of his major projects are going up in the frozen Midwest of Ohio.
The first is Arsenal-1, the Anduril Industries sprawling weapons factory, slated to hold 4,000 workers, is located next to Rickenbacker International Airport just outside Columbus.
“Anduril is not only revolutionizing America’s defense industry, but it’s joining the wave of coastal companies expanding to Ohio and bringing thousands of jobs and millions of dollars in capital investment to the Heart of it All,” Ohio Governor Mike DeWine said in announcing the project in January 2025.
Now, in a separate venture, Luckey is setting up Erebor Bank NA, which will have its headquarters in Columbus.
He’s not giving up on SoCal—Anduril is building a new factory in Long Beach.
“I love California,” Luckey on Feb. 27 told the California Post, an offshoot of the New York Post.
He said he could be forced to leave if the state becomes too inhospitable to business.
“If the technology industry, the talent, partners, supply chain and factories are all leaving, at some point the things that make California California are no longer there. I’d have no choice,” he told the Post.
—Kevin Costelloe
