Online prediction market Kalshi has secured $300 million in a new funding round, valuing the company at $5 billion, surpassing Polymarkets in market activity today. Sequoia Capital and Andreessen Horowitz led the round, marking a significant milestone in the development of prediction markets.
Paradigm, CapitalG, and Coinbase Ventures participated in the funding round, helping to drive the company’s valuation to more than double its initial market value. The funding round precedes Kalshi’s plans to expand the platform to a customer base in over 140 countries.
Kalshi surpasses Polymarkets in market activity with over 60% share
Kalshi’s annual trading volume has grown to approximately $50 billion, a steep rise from roughly $300 million last year. The firm has realized increased activities across the political, sports, and event-based markets. According to Dune Analytics, the online prediction market recently surpassed Polymarkets, a rival prediction firm, capturing over 60% of the global market share.
Tarek Mansour, CEO and co-founder of Kalshi, said that the company did not anticipate such rapid growth outpacing early forecasts.
The latest developments on Kalshi’s platform have sparked renewed competition in the sports betting industry. Following the news of the funding round, rival DraftKings’ stock dropped by 3.81% today, trading at $33.88, while Flutter Entertainment’s stock, on the other hand, has dropped by 1.36%, trading at $244.33.
Kalshi recently introduced complex parlay-style wagers, which have been attributed to the recent surge in market activity and renewed competition in the prediction market. The firm also integrated with brokerage firms such as Robinhood and Webull, which allows users to trade prediction contracts as easily as stocks.
Cryptopolitan covered a story in June highlighting Kalshi’s growth, which surpassed Polymarkets. The report revealed that Kalshi raised $185 million, pushing its valuation to $2 billion, with Paradigm leading the funding round. In June, the CFTC dropped its appeal blocking political market wagers, allowing Kalshi to list U.S. election-related predictions. According to the report, the market generated over $875 million during the 2024 U.S. election cycle.
Kalshi and Polymarket emerge as leaders in the prediction market race
Polymarket is reportedly preparing to launch in the U.S. market after facing restrictions in 2022. Business Insider reported that the firm is pursuing a new funding round that could value it at up to $9 or $10 billion, which Founders Fund may support. In June, Polymarkets received plans to secure $200 million in a funding round that could value it at $41 billion.
Polymarkets also rolled out Bitcoin deposits three days ago, as reported by Cryptopolitan. The prediction market has expanded its options beyond USDC, SOL, and Ethereum-based tokens to boost liquidity and accessibility. The report showed that Polymarket’s user base has surged to 259,000 monthly users, supported by a 43% rise in trading volume to $1.5 billion. The firm acquired QCX LLC to secure a CFTC Designated Contract Market license, which allows for self-certification of event contracts for U.S. customers. Polymarkets has also integrated with the X platform, linking its insights with the Grok chatbot.
However, despite its recent success, Kalshi has faced a backlash from U.S. regulators. U.S. state regulators argue that sports-related prediction contracts may resemble unlicensed gambling products. Tarek Mansour, CEO of Kalshi, responded that regulatory questions are part of innovation, and he believes that if no questions are asked, then there is no meaningful innovation going on. On a brighter note, the CFTC dropped its lawsuit against Kalshi’s election-related contracts earlier this year, allowing the firm to maintain its operations in the U.S.
Both Kalshi and Polymarket continue to gain mainstream adoption, positioning themselves as leaders in the prediction market sector, which connects finance, data, and real-time event trading.
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