Prediction market platform Kalshi has finalized a new funding round valuing the company at $40 billion, according to people familiar with the matter. The round is expected to be the last before an initial public offering anticipated in 2027.
The valuation nearly doubles Kalshi's prior $22 billion Series F round completed in May 2026. At a $40 billion post-money valuation, Kalshi would rank among the most valuable private fintech companies in the United States, approaching the scale of traditional derivatives exchanges in terms of market capitalization.
Kalshi operates a platform where users trade binary contracts on real-world events: elections, economic data, geopolitical outcomes and weather. The platform has grown from a $2 billion Series E valuation in 2023 to its current $40 billion in less than three years. Prediction markets have moved from niche speculation to institutional adoption.
Prediction markets operate by letting buyers bet on binary outcomes at prices that reflect probability. If a contract settles at 70 cents, the market has priced the outcome at 70 percent likelihood. Kalshi's growth comes as institutions have adopted these instruments as hedging tools and as real-time probability indicators for decision-making.
Sequoia Capital and Wellington Management led earlier funding rounds into Kalshi, according to sources. The company has not disclosed the size of the new round or its specific backers, but people familiar with the financing estimate it at approximately $1 billion based on the valuation step from the May round.
Kalshi's path to an IPO next year would make it among the first prediction market platforms to go public. The company has operated under regulatory scrutiny from the U.S. Commodity Futures Trading Commission, which has authority over binary options and derivatives trading. In 2024 and 2025, the CFTC clarified its treatment of certain prediction market contracts, creating clearer pathways for platforms like Kalshi to operate in the United States.
The $40 billion valuation represents a 1.8 times multiple on the prior $22 billion round completed five months earlier. Kalshi has grown from a $2 billion valuation in 2023, a 20-fold increase in roughly three years as institutional participation in prediction markets has accelerated.
Kalshi's backers are betting on the company's path to public markets and institutional acceptance of prediction markets as a category. The number that decides whether Kalshi launches its IPO on schedule is whether the CFTC issues any enforcement actions or interpretive guidance that materially restricts the types of contracts Kalshi can offer between now and mid-2027.
