Kalshi Reaches $5B Valuation - Follows Polymarket's NYSE Backing

Kalshi Secures $300 Million, Reaching $5 Billion Valuation

Kalshi, a platform enabling users to wager on the outcomes of future events, has announced a successful funding round exceeding $300 million. This investment has propelled the company’s valuation to $5 billion.

The company experienced a substantial increase in value, growing 2.5 times since its previous funding round just three months prior, which had valued it at $2 billion.

Investment Details

This new capital infusion was led by Kalshi’s current investor, Sequoia Capital, alongside participation from new investor Andreessen Horowitz.

Additional investors in the round included Paradigm Ventures, CapitalG, and Coinbase Ventures.

Expanded Global Access

Kalshi has also announced an expansion of its user base, now allowing individuals from 140 countries to participate in its prediction markets.

Significant Growth in Trading Volume

The prediction market sector is witnessing a considerable upswing in activity. Kalshi is projected to achieve an annualized trading volume of $50 billion.

This represents a significant jump from the approximately $300 million in volume recorded last year, as reported by the New York Times.

Competition and Regulatory Landscape

Kalshi’s funding announcement closely follows a similar announcement from its competitor, Polymarket.

Polymarket revealed it had secured an investment of up to $2 billion from Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange, at a pre-money valuation of $8 billion.

This deal valued Polymarket at $8 billion pre-money, a dramatic increase from its $1 billion valuation in August.

Rise to Prominence

Both Kalshi and Polymarket gained considerable attention last year due to their prediction markets centered around the U.S. presidential election.

Regulatory Challenges and Resolutions

Polymarket faced restrictions, being barred from serving U.S. residents since 2022 following a settlement with the Commodity Futures Trading Commission (CFTC).

In July, the company strategically acquired a derivatives exchange and a clearing house, enabling it to regain access to the U.S. market.

Polymarket’s CEO and founder, Shayne Coplan, announced on X (formerly Twitter) last month that the CFTC had granted the company permission to operate in the USA.

Kalshi successfully secured U.S. market access for its users after winning a lawsuit against the CFTC last year.