Thiel-Backed Bank Set to Double Valuation to $4.35 Billion

A Silicon Valley-focused banking startup backed by Palantir Technologies Inc. co-founder Peter Thiel is expected to raise $350 million in a funding round that would more than double its valuation.

Erebor Bank, named for the treasure-filled mountain in J.R.R Tolkien’s The Hobbit, is raising money from funds led by Lux Capital in a round that values the firm at $4.35 billion, according to a person with knowledge of the matter who asked not to be identified citing private information. The round also includes existing investor 8VC.

Palmer Luckey

Photographer: Kyle Grillot/Bloomberg

The bank has positioned itself to attract crypto and tech-focused clients, partly filling ...