Kalshi, a prediction market that allows people to bet on future events, has raised a massive one billion dollar round at an eleven billion dollar valuation, according to a person familiar with the deal. This round comes less than two months after the seven-year-old startup announced its previous fundraise of three hundred million dollars at a five billion dollar valuation.
The latest round is led by the company’s returning investors Sequoia and CapitalG. Other investors in Kalshi include Andreessen Horowitz, Paradigm, Anthos Capital, and Neo. Kalshi and Sequoia declined to comment. CapitalG did not respond to a request for comment.
Kalshi’s main rival, Polymarket, was reportedly in talks last month to raise another funding round at a twelve to fifteen billion dollar valuation. This news came mere weeks after Polymarket closed a one billion dollar round at an eight billion dollar pre-money valuation.
Kalshi and Polymarket surged in popularity last year after both prediction markets allowed people to bet on the outcome of the presidential election. These betting sites became even more prominent after they correctly predicted the results of New York City’s mayoral election earlier this month.
For the Mamdani versus Cuomo race, Kalshi purchased ad space on New York subway cars. The company ran live screens that displayed the up-to-the-minute odds of each candidate winning, a marketing campaign that undoubtedly raised its brand awareness among New Yorkers.
Kalshi allows people in over one hundred and forty countries to bet on various future events. These range from who Time Magazine will name Person of the Year for 2025 and the Rotten Tomatoes score for the film Wicked, to outcomes further in the future, like the next U.S. Presidential election winner.
In mid-October, the company reached fifty billion dollars in annualized trading volume. This marks a more than one thousand-fold increase from the approximately three hundred million dollar volume posted last year.
Kalshi was co-founded by two former hedge fund traders, Tarek Mansour and Luana Lopes Lara. The duo met as undergraduate students at MIT while studying Computer Science and Mathematics.
Prediction markets have historically been controversial and subject to legal challenges because they operate in the gray area between financial instruments and traditional gambling.
While Kalshi has secured the right for Americans to use its platform after successfully suing the CFTC last year, the company is currently engaged in legal disputes with numerous state regulators who claim its activities are illegal gambling.
Polymarket has been barred from serving U.S. residents since 2022, following a settlement with the Commodity Futures Trading Commission. In July, the company acquired a derivatives exchange and a clearing house. This move helped Polymarket receive the right to reenter the U.S. market. In September, the company’s CEO and founder, Shayne Coplan, stated that Polymarket has been given the green light to go live in the USA by the CFTC.