Erebor Bank's deposits hit $4.6B by end-July; the $1.5B raise would nearly double its valuation and add capital under a 12% leverage requirement.
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Erebor Bank is in advanced talks to raise about $1.5 billion in a deal that would value the year-old firm at roughly $9.5 billion, the Financial Times reported, citing people familiar with the matter.
Lux Capital, Human Capital, Valor Equity Partners, Andreessen Horowitz and SV Angel are each expected to commit large sums to the round. Existing backers, including 8VC and Haun Ventures, are also set to participate, the FT said.
The raise follows rapid balance-sheet growth. Deposits reached $4.6 billion by the end of July, up from $1.1 billion at the end of March, according to the report. Erebor targets companies working in crypto, artificial intelligence, defense and manufacturing, and its planned services include deposits, credit, stablecoin products, treasury management and payments.
Erebor received its final U.S. approval to operate in February. Regulators require a leverage ratio of at least 12% for its first three years, a constraint that makes fresh capital important as the balance sheet expands. At that minimum, the bank needs roughly $1 of capital for every $8 of leverage exposure.
The lending side is already live. Erebor is leading a $200 million credit facility for nuclear start-up Valar Atomics, and Valar said earlier this month that Erebor serves as administrative agent. JPMorgan is also on the facility. Crescent Cove and Hercules Capital are participating as well.
The FT reported that Erebor raised money earlier this year at a $4.35 billion valuation. The proposed round would nearly double that figure.
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