Kalshi Valuation Surges to $11B After $1B Funding Round

Kalshi Secures $1 Billion Funding Round

A significant investment has been made in Kalshi, a platform enabling users to wager on the outcomes of future events. According to sources, the company has successfully raised $1 billion, resulting in an $11 billion valuation.

This funding round arrives less than two months following Kalshi’s announcement of a previous $300 million raise, which valued the startup at $5 billion.

Investment Details

The current investment round is spearheaded by existing investors Sequoia and CapitalG. Additional participants include prominent firms such as Andreessen Horowitz, Paradigm, Anthos Capital, and Neo.

Representatives from Kalshi and Sequoia have declined to provide commentary on this matter. CapitalG has not yet responded to inquiries for a statement.

Competition in the Prediction Market

Kalshi’s primary competitor, Polymarket, was reportedly exploring a new funding round last month. Discussions centered around a valuation between $12 billion and $15 billion.

This potential raise followed a recent $1 billion round that established Polymarket’s pre-money valuation at $8 billion, as reported by Bloomberg.

Growing Popularity

Both Kalshi and Polymarket experienced a surge in user engagement last year. This growth was largely fueled by the ability to bet on the results of the presidential election.

Their accuracy was further demonstrated when both platforms correctly predicted the outcome of the New York City mayoral election earlier this month.

Marketing and Expansion

Kalshi actively promoted its services during the Mamdani versus Cuomo race. The company strategically purchased advertising space on New York subway cars.

These advertisements featured live screens displaying real-time odds for each candidate, effectively increasing brand recognition among New York commuters.

Global Reach and Event Coverage

Kalshi currently extends its services to individuals in over 140 countries. Users can place bets on a diverse range of future events.

Examples include predictions for Time magazine’s Person of the Year in 2025, the Rotten Tomatoes score of the film Wicked, and the winner of future U.S. presidential elections.

Trading Volume Growth

The company reported reaching $50 billion in annualized trading volume in mid-October. This represents a substantial increase – over a thousandfold – compared to the approximately $300 million volume recorded last year, according to the New York Times.

Founding and Background

Kalshi was established by Tarek Mansour and Luana Lopes Lara, both former traders with experience in the hedge fund industry.

The founders initially connected as undergraduate students at MIT, where they pursued studies in computer science and mathematics.

Legal and Regulatory Challenges

Prediction markets have historically faced scrutiny and legal challenges. This is due to their position within a complex regulatory landscape, existing between financial instruments and traditional gambling.

Kalshi successfully challenged the Commodity Futures Trading Commission (CFTC) in court last year, securing the right for Americans to utilize its platform.

However, the company is currently involved in ongoing legal disputes with several state regulators who contend that its operations constitute illegal gambling.

Polymarket's Regulatory Path

Polymarket has been restricted from serving U.S. residents since 2022, following a settlement agreement with the CFTC.

In July, the company strategically acquired a derivatives exchange and a clearinghouse. This acquisition facilitated Polymarket’s ability to re-enter the U.S. market.

Shayne Coplan, Polymarket’s CEO and founder, announced on X in September that the CFTC had granted the company permission to operate within the USA.