US prediction market operator Kalshi is reportedly in talks to raise a new funding round that would value the company at about $40 billion, nearly double the $22 billion valuation it reached in May. Insiders say the round could close as early as the third quarter.
Kalshi completed a $1 billion Series F in May led by Coatue Management, with participation from Andreessen Horowitz, Sequoia Capital, Morgan Stanley and Ark Invest. That financing pushed the firm’s valuation from roughly $11 billion in December and $5 billion in October to $22 billion in May. If the $40 billion target is reached, Kalshi’s value would have risen roughly eightfold within a year, highlighting strong investor appetite for prediction markets.
The potential valuation would also exceed the last reported valuation for rival Polymarket, which was about $15 billion in April. Kalshi has grown quickly in trading activity: Token Terminal data showed Kalshi’s monthly notional trading volume at $17.9 billion in May versus Polymarket’s $7.1 billion. The two platforms traded places in volume last year after Kalshi teamed with Robinhood to offer markets tied to NFL and college football outcomes, a move that helped widen its lead.
Kalshi was founded in 2018 by Tarek Mansour and went public in July 2021. Prediction markets gained momentum in 2024 amid interest around the US presidential election and broader investor enthusiasm for event-based trading.
Big tech and traditional markets firms are taking notice. Reports say Meta has explored building a prediction markets app called Arena, while Cboe Global Markets recently launched Cboe Predicts, offering binary contracts linked to the S&P 500.
The sector faces legal and regulatory challenges. Multiple US states have argued that event contracts tied to sports constitute sports betting and fall under state gaming rules; Kentucky recently sued five prediction market platforms, including Kalshi and Polymarket, alleging they operated unlicensed sports betting services. The US Commodity Futures Trading Commission maintains that it has exclusive jurisdiction over these markets and has sued some state authorities, including Kentucky, to block state-level enforcement.
Kalshi declined to comment on the fundraising reports. The company and its backers continue to navigate rapid growth, competition from both crypto-native rivals and established financial and tech firms, and an active legal landscape that will shape the industry’s path forward.