â–¼ Summary
– Kalshi raised $1 billion at an $11 billion valuation, doubling its valuation from two months prior when it raised $300 million at $5 billion.
– The funding round was led by returning investors Sequoia and CapitalG, with participation from Andreessen Horowitz, Paradigm, Anthos Capital, and Neo.
– Kalshi and its rival Polymarket gained popularity by allowing bets on political events like presidential and mayoral elections, with Kalshi using subway ads in New York to boost awareness.
– Kalshi reached $50 billion in annualized trading volume in mid-October, a massive increase from the $300 million volume reported the previous year.
– Kalshi faces legal challenges from state regulators over gambling claims, despite winning a lawsuit with the CFTC to operate in the U.S., while Polymarket was barred but recently regained U.S. market access.
The prediction market platform Kalshi has secured a monumental $1 billion in fresh funding, catapulting its valuation to an impressive $11 billion. This development arrives just weeks after the company announced a previous $300 million round that valued it at $5 billion, highlighting a period of rapid expansion and investor enthusiasm.
Leading this latest investment are returning backers Sequoia and CapitalG. Additional participants in the funding round include prominent firms such as Andreessen Horowitz, Paradigm, Anthos Capital, and Neo. Representatives from Kalshi and Sequoia opted not to provide comments, while CapitalG did not reply to inquiries.
Kalshi’s primary competitor, Polymarket, is also making significant moves. Reports indicate that Polymarket was recently negotiating its own substantial funding round, targeting a valuation between $12 billion and $15 billion. This follows closely on the heels of its own $1 billion raise at an $8 billion pre-money valuation.
Both Kalshi and Polymarket experienced a major surge in user engagement last year when they enabled betting on the U.S. presidential election. Their credibility was further enhanced when they accurately forecast the results of New York City’s recent mayoral race. To capitalize on this event, Kalshi launched an innovative marketing campaign, purchasing ad space on New York subway cars that displayed live, updating odds for the candidates, significantly boosting its visibility among city residents.
The platform offers users in more than 140 countries the opportunity to wager on a diverse array of future occurrences. These range from predicting Time magazine’s 2025 Person of the Year and the Rotten Tomatoes score for the upcoming film “Wicked” to forecasting the winner of the next U.S. presidential election.
A report from the New York Times highlighted the platform’s explosive growth, noting that Kalshi achieved $50 billion in annualized trading volume by mid-October. This figure represents an increase of more than a thousand times compared to the approximately $300 million volume recorded the previous year.
Kalshi was established by Tarek Mansour and Luana Lopes Lara, both of whom previously worked as hedge fund traders. The co-founders first connected during their undergraduate studies at MIT, where they focused on computer science and mathematics.
Prediction markets often find themselves at the center of legal and regulatory debates, operating in a gray zone that blends elements of financial markets with conventional gambling. Kalshi itself fought a legal battle with the Commodity Futures Trading Commission (CFTC) last year, winning the right for Americans to access its platform. Despite this federal victory, the company continues to face legal challenges from several state regulators who argue that its operations constitute illegal gambling.
In contrast, Polymarket has been prohibited from serving U.S. residents since 2022, following a settlement with the CFTC. However, the company took strategic steps to reenter the market by acquiring a derivatives exchange and a clearinghouse in July. These acquisitions paved the way for Polymarket to receive regulatory approval to operate in the United States again. In September, the company’s CEO and founder, Shayne Coplan, publicly announced on the social media platform X that “Polymarket has been given the green light to go live in the USA by the CFTC.”
(Source: TechCrunch)
