US-based prediction market platform Kalshi is reportedly in talks to raise funds at a $40 billion valuation, nearly doubling its $22 billion valuation in May.
The company could close the new funding round as soon as the third quarter of this year, the Financial Times reported on Wednesday, citing people familiar with the matter.
Kalshi closed a $1 billion Series F in May, led by Coatue Management, with participation from Andreessen Horowitz, Sequoia Capital, Morgan Stanley and Ark Invest. Its $22 billion valuation at the time was double the company’s $11 billion valuation in December and more than four times its $5 billion valuation in October.
If the new funding round closes at a $40 billion valuation, Kalshi’s value would have increased eightfold in less than a year, underscoring a surge in investor interest in prediction markets. The valuation would also far surpass Polymarket’s last reported valuation of $15 billion in April.
Kalshi declined to comment.
Kalshi was founded in 2018 by Tarek Mansour and launched publicly in July 2021, with prediction markets gaining significant momentum in 2024 in the run-up to the US presidential election.
While Polymarket was the clear leader in trading volume in 2024, the two prediction market platforms flipped around September last year as Kalshi partnered with Robinhood to let users trade on outcomes of NFL and college football games.
Notional weekly trading volumes of Kalshi (green) and Polymarket (blue). Source: Token Terminal
The gap has continued to widen over the last nine months. As of May, Kalshi’s monthly notional trading volume was $17.9 billion, compared with Polymarket’s $7.1 billion, according to data from Token Terminal.
The success of prediction markets has reportedly drawn interest from social media and tech giant Meta, with CEO Mark Zuckerberg directing staff to create a prediction markets mobile app called “Arena” to challenge Kalshi and Polymarket, according to the New York Times.
Related: Kalshi in early IPO talks with investment banks: Report
Meanwhile, market operator Cboe Global Markets on Tuesday entered the prediction markets business with the launch of Cboe Predicts, a platform debuting with binary contracts tied to the S&P 500.
Prediction markets have been pulled into legal battles across the US, with several states arguing that their event contracts tied to sports are sports betting regulated by state gaming authorities.
Kentucky was the latest state to take action, suing five prediction market platforms last week, including Kalshi and Polymarket, to accuse them of “operating unlicensed and illegal sports betting and gambling platforms.”
The US Commodity Futures Trading Commission has claimed it has exclusive authority over prediction markets, arguing they are registered with the agency.
The CFTC has sued multiple state authorities that have taken action against prediction markets, including Kentucky on Tuesday, in a bid to block states’ attempts to police the platforms.
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