- Kalshi is seeking fresh capital at a $40B valuation, nearly triple the $15B target its biggest rival Polymarket is reportedly chasing.
- The gap signals a widening divide between regulated and crypto-based prediction markets, with institutional money betting heavily on the former.
- Kalshi’s CEO confirmed on June 24 the company is weighing an IPO, though a public listing is unlikely before 2027.
Two prediction markets platforms are raising money at the same time. The gap between their valuations tells you which model investors believe will win.
Kalshi, the federally regulated event contracts exchange co-founded by MIT classmates Tarek Mansour and Luana Lopes Lara, is seeking fresh capital at roughly $40B, nearly double its previous $22B valuation, according to a Financial Times report. Its biggest rival, blockchain-based Polymarket, is reportedly targeting a raise at $15B.
The Kalshi deal could close as early as Q3 2026.
Regulated vs crypto: the fork in the road
Kalshi launched in 2018 after Mansour, a former trader at Citadel Securities, and Lopes Lara, a quantitative finance specialist, decided that financial markets could become the most accurate forecasting tool available.
The platform operates as a federally regulated exchange under the US Commodity Futures Trading Commission, letting users trade on the probability of outcomes ranging from Federal Reserve decisions to election results to sports events. That regulatory standing is what separates it from most rivals.
Polymarket does the same thing differently. It runs on blockchain infrastructure, settles in cryptocurrency, and operates without US regulatory approval, making it faster and more accessible internationally, but further from the institutional credibility Wall Street demands.
Both platforms surged in visibility during the 2024 US election cycle, when prediction markets briefly became the go-to gauge for political forecasters. Their fundraising trajectories have since diverged sharply.
Kalshi’s May 2026 round, a $1 billion Series F that valued the company at $22 billion, drew Coatue Management, Sequoia Capital, Andreessen Horowitz, Morgan Stanley, and ARK Invest. Polymarket, by contrast, is reportedly seeking a $15B valuation, less than half of Kalshi’s target.
The growth numbers back the premium. Monthly trading volume on Kalshi’s platform recently surpassed $17B, up from roughly $5B a year earlier, a more-than-threefold increase in 12 months.
The legal headwinds investors are pricing in
The fresh round does not arrive without risk. More than a dozen US states have filed lawsuits against Kalshi, alleging it operates unlicensed sports betting. Sports-related event contracts now account for an estimated 65–90% of Kalshi’s trading activity, making the outcome of these legal battles central to the company’s growth story.
Kalshi disputes the states’ characterisation, arguing CFTC oversight gives it exclusive federal jurisdiction over its exchange-traded contracts. The CFTC itself has sued several states to block enforcement actions. The dispute is expected to reach the Supreme Court.
Earlier this week, Mansour confirmed in a CNBC interview that Kalshi is evaluating a potential IPO, though he said a public listing is unlikely before 2027.
Whether Kalshi’s regulatory moat holds as state courts push back and Polymarket pursues its own credibility play is the question a $40B valuation cannot yet answer.
