Kalshi prediction market platform draws VC interest at $10-12B valuations

Kalshi prediction market platform is drawing fresh investor interest at valuations of $10 billion to $12 billion, weeks after its $300 million funding round at a $5 billion valuation.

Summary

• Venture capitalists are discussing investments that could more than double Kalshi’s valuation.
• Recent interest follows rapid growth after Kalshi’s 2024 court victory enabling presidential election contracts.

Kalshi prediction market operator is attracting fresh investor interest at valuations exceeding $10 billion, people familiar with the discussions told Bloomberg.

The offers come just weeks after the New York–based company closed a $300 million round at a $5 billion valuation, led by Andreessen Horowitz and Sequoia Capital. Earlier this year, Kalshi had raised $185 million at a $2 billion valuation in a deal backed by Paradigm.

The new funding momentum builds on Kalshi’s rapid ascent following a pivotal 2024 court victory that cleared the way for trading on U.S. presidential election contracts, driving activity to record highs. Kalshi has since expanded its licensed markets to include sports outcomes, fueling competition with rival Polymarket, which recently secured backing from Intercontinental Exchange at an $8 billion valuation.

Prediction markets under regulatory pressure

Despite the growing investor enthusiasm around prediction markets, regulatory scrutiny remains a significant hurdle for Kalshi and the sector. While the Commodity Futures Trading Commission has granted Kalshi the authority to list certain event-based contracts, state-level gaming regulators have pushed back, particularly around sports betting, arguing that some markets may fall under traditional gambling laws.

For instance, the Massachusetts Attorney General recently filed a lawsuit accusing Kalshi of operating an unlicensed sports wagering platform, highlighting concerns over public health risks and consumer protections.

Experts also caution that prediction markets could be vulnerable to market manipulation and insider trading, especially in contracts tied to sensitive political or corporate events. For example, traders with advance knowledge of election results, policy announcements, or corporate disclosures could potentially exploit these platforms for profit, raising legal and ethical concerns.

Kalshi has implemented compliance measures and monitoring systems to detect suspicious trading activity, but long-term regulatory clarity remains uncertain.