Kalshi Raises $1 Billion to Expand Prediction Market Platform

Kalshi raised $1 billion in a Series E funding round to expand its prediction market platform.

The company will use the new capital to accelerate consumer adoption, integrate more brokerages, add new partnerships and broaden its product offerings, it said in a Tuesday (Dec. 2) press release.

The round valued Kalshi at $11 billion, according to the release.

“Kalshi is replacing debate, subjectivity and talk with markets, accuracy and truth,” Kalshi CEO Tarek Mansour said in the release. “We have created a new way of consuming and engaging with information. It’s hard to have an opinion about the future today without thinking about Kalshi.”

Kalshi was founded in 2018 and is credited with legalizing and establishing prediction markets as a financial asset class, according to the release.

Its trading volumes have grown over 1,000% year over year to surpass $1 billion per week, the release said.

The company’s platform is now used by millions of users each week to trade the future in more than 3,500 markets, per the release.

Matt Huang, co-founder and managing partner at Paradigm, which led the funding round, said in the release that Kalshi’s growth “shows the scale of latent demand for prediction markets as a new asset class.”

“People come for one type of market and stay for the breadth,” Huang said. “We see this as an uncapped cultural and economic phenomenon, similar to how we felt about crypto a decade ago.”

PYMNTS reported in October that the momentum in the prediction market space is being driven in part by market architecture that allows for a broad range of products packaged as yes/no contracts or binary outcomes and by the entry of major platforms.

Because they are regulated federally by the Commodity Futures Trading Commission (CFTC), prediction markets have the opportunity to capture users across states that have individually stringent laws regarding iGaming, sports betting and gambling.

When the CFTC issued a no-action letter regarding event contracts in September, PYMNTS reported that the momentum of prediction markets appeared set to continue its trajectory after having already leapt from obscure crypto experiments into the heart of financial, political and cultural debate.

Other companies are working to grow their presence in this space too. They include digital gaming company DraftKings, which acquired Railbird Technologies to expand into prediction markets; online gambling service FanDuel, which partnered with derivatives market CME Group to offer sports event contracts; and financial services platform Robinhood, which announced a deal to acquire derivatives exchange LedgerX to expand its prediction markets footprint.

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