Prediction Market War: Kalshi Hits $5B Valuation with Sequoia & a16z Funding, Following Polymarket’s $8B NYSE-Backed Deal
Kalshi Secures Mega-Funding Round as Prediction Market Competition Heats Up
Kalshi, the leading regulated prediction market platform that allows users to place bets on the outcome of future events, has announced a massive fundraise, securing over $300 million at an astounding $5 billion valuation. This funding represents a phenomenal 2.5x increase in the company’s valuation from its last funding round just three months ago, when it was valued at $2 billion.
The fresh capital for this round was led by Kalshi’s existing, high-profile investor, Sequoia Capital, with new investor Andreessen Horowitz (a16z) notably co-leading the round. Other prominent firms that participated in the financing included Paradigm Ventures, CapitalG, and Coinbase Ventures. This injection of capital underscores the dramatic confidence investors have in the burgeoning prediction market sector.
Kalshi also revealed a major expansion in its global reach, announcing that consumers in 140 countries can now make bets on its platform. The company is experiencing a dramatic surge in activity, with the New York Times reporting that Kalshi is projected to reach $50 billion in annualized trading volume, a colossal increase from the approximately $300 million volume posted just last year.
Kalshi’s impressive fundraise announcement follows, by only a few days, a massive financial maneuver by its archrival, Polymarket. Polymarket revealed that it had secured an investment of up to $2 billion from Intercontinental Exchange (ICE), the parent company and owner of the New York Stock Exchange (NYSE). This strategic deal valued Polymarket at an enormous $8 billion pre-money valuation, a monumental and rapid increase from its $1 billion valuation only two months earlier in August.
Both Kalshi and Polymarket first rose to prominent visibility last year, successfully drawing significant national attention for their respective prediction markets concerning the outcomes of the presidential election.
Polymarket has historically been barred from serving U.S. residents since 2022, following a crucial settlement with the Commodity Futures Trading Commission (CFTC). However, in July, the company executed a strategic acquisition of a derivatives exchange and a separate clearing house. This tactical move significantly helped Polymarket receive the right to reenter the U.S. market. Just last month, the company’s CEO and founder, Shayne Coplan, publicly stated on X: “Polymarket has been given the green light to go live in the USA by the CFTC.”
In contrast to its rival’s regulatory path, Kalshi proactively secured the right for Americans to use its prediction platform after successfully suing the CFTC last year, effectively gaining regulatory clarity and a competitive advantage in the domestic market.
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What are your predictions for the US prediction market space now that both Kalshi and Polymarket are set to compete head-to-head for market dominance? Which VC-backed company will ultimately win? Leave a comment below and/or share this news on your social media to inform more people about the hottest things in Fintech, Venture Capital, and Market Regulation!
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