Prediction market platforms Polymarket and Kalshi have each raised more than $150 million from investors in their latest funding rounds, according to recent reports. The subsequent $1 billion-plus valuations for each company would give both “unicorn” status.
A $200 million funding round, led by billionaire Peter Thiel’s Founders Fund, would put Polymarket’s valuation at over $1 billion, according to the news first reported on June 24 by The Information, citing anonymous sources familiar with the situation. Reuters and Bloomberg confirmed the report, saying the investments are still being finalized.
On June 25, Kalshi told The Wall Street Journal that it had been valued at $2 billion after raising $185 million, led by Paradigm, a venture capitalist firm that focuses on cryptocurrency investments like Uniswap and Coinbase.
Regarding why the firm invested, Paradigm co-founder and managing partner Matt Huang said in a June 25 press release:
“Prediction markets remind me of crypto 15 years ago: a new asset class on a path to trillions. There’s no better team than Kalshi to scale prediction markets and reshape how people think about everything from elections and economic markets to weather and sports.”
Investors include familiar faces
Kalshi co-founder and CEO Tarek Mansour told the WSJ that some of the latest funding would go to scaling up its technology team and integrate with more brokers. Brokerages like Webull and Robinhood currently give access to Kalshi’s prediction markets on their respective platforms. Mansour said more than a dozen similar broker partnerships were in the works.
Along with Paradigm, other investors in this latest round of Kalshi funding include crypto and blockchain company investor Multicoin Capital and Peng Zhao, CEO of capital markets firm Citadel Securities. Venture capital firm Sequoia Capital, which led Kalshi’s first funding round in 2021, also participated in the latest round.
Outside of Thiel’s Founders Fund, no other investors from Polymarket’s latest round of funding were revealed in the news reports. Founders Fund was also involved in Polymarket’s Series B round of funding last year. The San Francisco-based VC has invested in many other major ventures, including Space X, Facebook, Airbnb, Spotify, Open AI and Lyft.
Latest funding rounds top total previous investments
In these latest funding rounds, both Polymarket and Kalshi far exceeded the total funding from previous rounds.
In 2021, Kalshi raised $30 million in a Series A funding round, led by Sequoia Capital, with participation from Charles Schwab, KKR & Co. Inc’ Henry Kravis, SV Angel and previous investors like Neo and YC Continuity. In 2024, Kalshi secured around $50 million in a formal equity round from undisclosed investors.
Polymarket raised $80 million in two funding rounds in 2024. Series A funding of $25 million was led by global investment company General Catalyst, while the Series B funding of $45 million was led by Founders Fund.
Investors see bright future for prediction markets
The huge investments and valuations come on the heels of increased attention and trading volume prediction market platforms have attracted in the past year. The raised profiles are in part due to the publicity around markets predicting the outcome of the 2024 election ahead of the polls.
Bloomberg reported that in November, Polymarket recorded $2.6 billion in trading volume, a whopping 37,700% year-over-year increase. Trading volume also increased with the addition of sports markets that let users trade on single-game and series outcomes.
According to the WSJ, investors are likely attracted to prediction market platforms due to interest from younger customers, as well as a “more favorable regulatory environment.”
Regulatory hurdles — and new tailwinds
Both Kalshi and Polymarket have faced legal challenges and regulatory hurdles, but the current administration in the U.S. is believed to be more favorable to prediction market platforms going forward. President Donald Trump appointed Kalshi board member Brian Quintenz to chair the Commodity Futures Trading Commission (CFTC), which oversees prediction market regulation on a federal level. Given his experience, Quintenz, who is still awaiting Senate approval, may be more open to prediction market expansion.
Polymarket is not available to U.S. users, part of a settlement agreement with the CFTC, which had charged Polymarket with operating an unauthorized derivatives market. Polymarket’s CEO, Shayne Coplan, has said re-entry into the lucrative U.S. market is one of the company’s top priorities.
Available in all 50 states, Kalshi was the first prediction market platform approved by the CFTC, but it has battled the agency over its offering of election-related prediction markets. The legal wrangling ended this year with the CFTC dropping the appeal of its lawsuit.
Kalshi has recently faced legal action in various states over its ability to offer sports prediction markets, which several states with legal sports betting say amounts to unregulated sports wagering.
