Kalshi has completed a major $185 million funding round led by the crypto-focused venture capital firm Paradigm, elevating its valuation to approximately $2 billion post-investment, company representatives confirm.
Matt Huang, managing partner and co-founder of Paradigm, described prediction markets as an emerging asset class capable of reaching trillion-dollar scale—a trajectory reminiscent of the crypto landscape a decade and a half ago. Huang praised Kalshi’s team, stating they’re uniquely positioned to bring prediction markets to broad adoption, extending their influence over numerous sectors, from economic forecasting and political elections to sporting events and weather predictions.
This funding news comes immediately on the heels of reports that Kalshi’s primary competitor, Polymarket, is also seeking substantial new investment. Polymarket is planning a fundraising round of about $200 million at a pre-money valuation around $1 billion, led by Founders Fund, although this deal hasn’t yet closed. Founders Fund representatives have declined to comment on the status of negotiations.
Prediction markets leverage blockchain technology, allowing users to wager on outcomes spanning popular culture, politics, economics, and more. Kalshi’s higher valuation likely reflects its significantly stronger regulatory standing compared to its rival. Polymarket has faced major regulatory hurdles; since 2022, the platform has been banned in the United States following enforcement action by the Commodity Futures Trading Commission (CFTC). Additionally, multiple other jurisdictions, including the UK, France, Ontario, Singapore, Belgium, Poland, Thailand, and Taiwan, have also restricted or banned Polymarket, considering its prediction markets as either betting or securities trading operations that should be subject to relevant regulations.
In contrast, Kalshi successfully navigated its regulatory challenges by engaging proactively with the CFTC and securing a formal agreement. As a result, the platform can legally serve U.S.-based customers, potentially explaining the premium investors are willing to pay for a safer regulatory environment.
Nevertheless, Polymarket continues attempting a return to the U.S. market, taking advantage of a more crypto-friendly regulatory approach anticipated under the Trump administration. Earlier this month, Polymarket formed an official partnership with Elon Musk’s X, though details about that partnership remain sparse.
Ultimately, these developments underscore increasing investor appetite for prediction markets, reflecting a broader confidence in blockchain-based platforms, especially those positioned to navigate evolving regulatory frameworks.
