Erebor Bank nears $1.5B raise at $8B pre-money valuation

Crypto friendly Erebor Bank is nearing a roughly $1.5 billion funding round at an $8 billion pre-money valuation, according to people familiar with the discussions cited by the FT. 

The talks come only six months after the Columbus, Ohio lender received final approval to open as a U.S. national bank. Erebor has not announced the financing and declined to comment to the newspaper, meaning the size, valuation and investor commitments remain subject to change.

Lux Capital, Human Capital, Valor Equity Partners, Andreessen Horowitz and SV Angel are expected to make commitments, while existing investors 8VC and Haun Ventures are also reportedly participating. The $8 billion figure is before the proposed new capital is added. If the full $1.5 billion closes on those terms, the resulting valuation would be about $9.5 billion.

Erebor Bank deposits have climbed above $4 billion

Regulatory figures give some support to the growth behind the fundraising talks. Erebor’s latest call report showed about $4.06 billion in deposits and roughly $4.66 billion in assets at the end of June, compared with around $1.1 billion in deposits at March 31.

The FT reported that deposits increased further to $4.6 billion by the end of July, citing a person familiar with the figures. That July total has not yet appeared in a quarterly regulatory filing. The same source said Erebor had surpassed $100 million in annualized recurring revenue, another figure that has not been independently confirmed through public filings.

As previously reported, Erebor’s deposits had already climbed above $4 billion by early July, up sharply from its first quarter level. The earlier fundraising discussions were already targeting a valuation of at least $8 billion, making the latest reported $1.5 billion round an extension of talks that were underway before August.

U.S. charter gave Erebor room to pursue crypto clients

Erebor began operating after receiving its national bank charter on Feb. 6. The FDIC’s public records list the bank as established on that date, while the agency had approved its deposit insurance application in December 2025.

The bank was created to serve what its charter application called the U.S. innovation economy, including companies involved in digital assets, artificial intelligence, defense and advanced manufacturing. Erebor also planned to provide services to high and ultra high net worth individuals connected to those sectors. The OCC granted preliminary conditional approval in October 2025.

As previously reported, Erebor secured preliminary approval for its national bank charter after the OCC said legally permissible digital asset activities could be conducted by federally chartered banks when handled safely.

That policy direction has continued. The OCC said this week that digital asset firms engaged in permissible activities should have a route into the national banking system, as Comptroller Jonathan Gould pushes to revive de novo bank formation.

Erebor faces stricter capital requirements during early growth

Erebor’s rapid deposit expansion also raises the importance of its regulatory capital obligations. The FDIC approval requires the bank to maintain at least a 12% Tier 1 leverage ratio during its first three years, a higher threshold than many established banks operate under.

That requirement means fresh equity can support balance sheet growth as Erebor moves beyond deposits into lending. The bank has already appeared in a large industrial financing. Valar Atomics said on Aug. 3 that it closed a $200 million credit facility led by Erebor as administrative agent and JPMorgan, alongside Crescent Cove and Hercules Capital.

The facility accompanied Valar’s $1 billion Series B financing and gives an early example of Erebor targeting capital intensive companies outside conventional software startups. That fits its stated strategy of serving defense, energy, AI infrastructure and other sectors that often require larger credit facilities.

What happens next for Erebor’s $1.5 billion round

The financing has not closed. People familiar with the discussions told the FT that demand was strong and the transaction could be completed within weeks, but no final date has been announced. Erebor has also not publicly confirmed the investors, valuation or amount.

If completed at the reported terms, the round would mark another rapid valuation increase after Erebor was valued at about $4.35 billion in an earlier financing. For now, the more verifiable measure of its expansion is the balance sheet: deposits grew from roughly $1.1 billion in March to more than $4 billion by June, while lending has begun to expand into large technology and industrial projects.