Prediction market Kalshi hits $2B valuation in Paradigm-led deal
Kalshi, a prediction market platform, has secured $185 million in Series C funding, pushing its valuation to $2 billion. The funding round was led by crypto-focused investor Paradigm, with participation from Sequoia Capital, Multicoin, Neo, Bond Capital, and Citadel Securities CEO Peng Zhao.
Big bet on prediction markets
Kalshi, founded in 2018 by MIT graduates Tarek Mansour and Luana Lopes Lara, offers users the ability to trade on real-world events—ranging from sports and entertainment to politics and economic indicators. The company is approved by the U.S. Commodity Futures Trading Commission (CFTC), making it the first federally regulated prediction market in the United States.
With this funding, Kalshi aims to scale its operations and bring its event-based trading platform to a broader audience. CEO Tarek Mansour announced the funding milestone on X, stating that the company is focused on building “the most important financial market on the planet.”
Surge in user interest post-election
Prediction markets have grown rapidly since the last U.S. presidential election. Kalshi users can buy contracts based on outcomes such as whether a film will hit a specific Rotten Tomatoes score or if an athlete will retire by a certain date. The real-money model attracts traders who believe they can accurately forecast real-world outcomes.
Supporters of prediction markets argue that they provide more reliable data than traditional polling because participants have financial incentives to predict correctly. However, the model has attracted criticism, with some labelling it a disguised form of gambling. Kalshi disputes this, highlighting its full compliance with U.S. financial regulations.
Legal victory and market expansion
Kalshi gained significant traction after winning a court case against the CFTC last year, allowing it to list contracts tied to the U.S. presidential election. The ruling opened the door for other players in the sector and affirmed the legal status of Kalshi’s operations in the country.
The company first gained visibility through Y Combinator in 2019 and has since attracted high-profile investors, including SV Angel and Global Founders Capital.
Competition heats up
The investment comes as rival platform Polymarket also seeks to raise $200 million at a valuation exceeding $1 billion, according to Reuters. Unlike Kalshi, Polymarket is not registered with the CFTC and is not permitted to serve users in the United States.
The competition between the two intensified recently when Elon Musk’s social platform X named Polymarket its official prediction partner. Kalshi had earlier announced a similar agreement with X but later retracted it, citing that “details had not been mutually confirmed.”
