Billionaire investor Peter Thiel is backing a new crypto-friendly banking venture named Erebor, set to shake up the financial landscape following the dramatic collapse of Silicon Valley Bank (SVB) in 2023. According to sources reported by the Financial Times, Erebor is applying for a U.S. bank charter and aims to serve high-risk startups and digital asset firms shut out by traditional banks.

Thiel’s Founders Fund is a leading investor in the initiative, joined by Anduril co-founder Palmer Luckey and 8VC founder Joe Lonsdale. Erebor’s mission is clear: become the go-to lender for crypto firms and early-stage startups that face growing challenges under stricter banking regulations.

The collapse of SVB created a massive void in startup banking. Once a cornerstone of the tech and life sciences world, SVB failed in March 2023 when rising interest rates devalued its bond holdings. A panicked wave of client withdrawals triggered a liquidity crisis, making it the first FDIC-insured bank to go under that year. The shockwaves didn’t stop there—Silvergate Bank, Signature Bank, and First Republic soon followed, triggering a broader financial crisis and slamming the crypto sector.

Thiel, a longtime crypto supporter and PayPal co-founder, is also an investor in Bullish, a digital asset exchange preparing for a U.S. IPO. With Erebor, he’s doubling down on his belief that legacy banking no longer meets the needs of modern innovators.

While SVB now operates under First Citizens Bank, its original mission has been fractured. Erebor’s rise could signal a bold shift toward a future where crypto and startups aren’t sidelined—but front and center in the banking world.