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A group of high-tech billionaires led by Palmer Lucky, co-founder of military contractor Andrill, is preparing to launch a US bank that aims to fill the gap left by Silicon Valley Bank, serving startups, including cryptocurrency businesses.
To name Elebor, the bank will be supported by well-known technology investors, including Joe Lonsdale, founder of venture capital firm 8VC and co-founder of Peter Thiel’s defense group Palantil, according to those familiar with the issue.
Two people close to the issue say that Tiel’s venture capital fund, Founders Fund, will also be one of the investors.
Like Andril and Palantia, Elebor’s name is a reference to JRR Tolkien’s “The Lord of the Rings.” Elebor is a “solid mountain” and its treasure is resurrected from the Dragon Smaug.
Lucky and Lonsdale, a massive donor to Donald Trump in the 2024 US presidential election, hope that banks will take over the niche once occupied by SVB and take over the niche as lenders for risky companies and cryptocurrency players that traditional banks may reject.
Elebor has applied for the National Bank Charter of the US, a license that allows financial institutions to operate as banks.
“The bank will be a national bank… We will provide traditional banking products and cryptocurrency related products and services to businesses and individuals,” the application announced this week.
Its target market is companies that are part of the US “innovation economy,” Filing said, particularly high-tech companies focusing on cryptocurrencies, artificial intelligence, defense and manufacturing. They also provide services to individuals who work or invest in these companies.
They also planned to work with companies other than “looking for access to the US banking system.”
The co-founder of Elebor was the first to discuss starting a bank after the collapse of SVB in 2023, according to someone close to the issue. SVB was the main bank of US startups and venture capital backers.
The property was sold to the first citizen, which restarted the SVB, and many of its bankers moved to HSBC in the US. But investors and executives have been complaining about the gap in banking services for fledgling tech companies since the end of SVB.
Elebor said in his filing that he “distinguishes itself” by working with clients “inadequately provided with traditional or destructive financial institutions, particularly with regard to insufficient access to credit.”
Cryptocurrencies known as “Stablecoins” are fixed in real life assets such as the dollar and are expected to become an important part of the bank’s operations. The application aims to make Elebor “the most regulated entity that carries out and promotes stable transactions.”
Lucky and Lonsdale were not expected to be involved in the daily management of the bank, according to people familiar with the planning. It will be run by co-CEOS Jacob Hirshman, who previously worked as an advisor to Crypto Group Circle, and Owen Rapaport, co-founder and CEO of Digital Assets Software Company AER Compliance. Mike Heggone, former senior vice president of New Jersey-based Valley National Bank, will become the bank’s president.
Headquartered in Columbus, Ohio, with additional offices in New York, it provides digitally only customer service and markets all products and services via smartphone apps and websites.
Some of the applications have been filed confidentially and have not been made public with details about shareholders, stock structure, business plan details.
Lucky did not respond to requests for comment. Lonsdale confirmed that he is the financial backer of the project, but declined to comment further. A spokesman for Rapaport and Thiel declined to comment. Hirschmann and Hagern did not respond.
