Kalshi is in talks to raise $1 billion at a $40 billion valuation, nearly doubling its price from $22 billion in May, according to people familiar with the matter. Sequoia Capital and Wellington Management are leading the round, with Tiger Global and Dragoneer among other investors in talks to participate.
The valuation jump comes as the platform expands beyond sports and election betting into financial derivatives tied to economic data, regulatory outcomes and corporate earnings. Kalshi operates in the U.S. under Commodity Futures Trading Commission oversight and currently holds a market making license.
Kalshi's earlier funding round in May valued the company at $22 billion, a fourfold increase from its $5 billion valuation in 2023. The firm was founded in 2021 by Tarek Mansour and Luana Lopes and has become one of the largest prediction market operators in the world, competing with platforms like Polymarket, which operates under a different regulatory structure and is based in the Cayman Islands.
The company faced scrutiny from regulators and U.S. lawmakers concerned about prediction markets on federal elections and sensitive policy outcomes. In 2024, Kalshi sued the CFTC over its rejection of binary option contracts tied to U.S. political events, and a federal court sided with the company in preliminary judgment. That ruling cleared the path for Kalshi to offer prediction markets on outcomes including congressional control and presidential elections.
Institutional interest in prediction markets has grown across Wall Street. Several major asset managers and hedge funds have begun allocating capital to the space, viewing it as a new asset class with low correlation to traditional markets. Venture firms have also competed aggressively for ownership stakes in prediction market platforms, driving valuations upward across the sector.
Kalshi's $40 billion valuation implies the company has grown nearly 82 percent in value since May, outpacing most privately held fintech platforms. The round and investor composition show that multiple institutions view prediction markets as a sustained product. The number that decides whether Kalshi reaches that valuation is whether the round closes by the end of the fourth quarter, as the company has indicated to investors.
