Kalshi is in final negotiations for a funding round of roughly $1 billion that would value the prediction market platform at about $40 billion, according to Reuters and Bloomberg, up about 82 percent from the $22 billion valuation it set in May.
Sequoia Capital and Wellington Management are in talks to lead the round, with Tiger Global Management and Dragoneer Investment Group named as possible participants. People familiar with the confidential discussions told Reuters the deal would position the company for an initial public offering as early as next year. Chief executive Tarek Mansour told CNBC in June that a listing was under consideration but ruled out a 2026 debut. No formal prospectus has been filed.
The valuation trajectory shows how fast money has moved into the sector. Investors assigned Kalshi $11 billion last December. By March the figure was $22 billion, fueled by record trading volumes across the exchange. The current round would nearly quadruple the December number in under a year. Kalshi launched in 2021 as a federally regulated exchange for event contracts and spent its first years as a small venue for political and economic bets before volumes took off in 2025.
An IPO would be the first public listing for the young sector. Prediction markets went from niche political contracts to a multi-billion dollar asset class in about three years, helped by loosening attitudes toward event trading and by crypto traders hunting for new venues. Kalshi’s crypto perpetual futures product, launched earlier this year, was an early hit with that crowd.
Volume up fourfold in six months
The fundraising talk is backed by steep growth numbers. Kalshi’s annualized trading volume climbed from $52 billion to $178 billion over a six-month stretch, a figure the company disclosed alongside its May raise. Cumulative exchange volume topped $40 billion in August, a fourfold increase over six months, according to Dune Analytics data cited by Bloomberg.
July was the strongest month on record for the sector. Prediction markets handled $50.6 billion in trading volume that month, the highest ever, and Kalshi contributed $37.7 billion on its own. Polymarket, its closest rival, generated $12.9 billion across its combined US and international platforms. Institutional activity on Kalshi rose 800 percent in the six months to May, the company said.
The product mix has widened as fast as the volume. Beyond sports and elections, Kalshi now lists contracts on Federal Reserve decisions, inflation prints, weather, and a range of crypto prices. The perpetual futures product lets traders take leveraged positions on bitcoin and other assets without an expiration date, which pulled in flow that previously sat on offshore crypto exchanges.
How much volume is bought?
The growth has attracted scrutiny. A CNBC report published this week raised questions about trading volumes on some products across both Kalshi and Polymarket as the platforms expanded. Critics point to the mechanics behind the numbers: cashback programs, zero-fee crypto trading and heavy marketing spending that pull in order flow the platform effectively pays for.
An analysis by AINVEST estimated Kalshi’s revenue at roughly $4 billion annualized and argued that a large share of its volume depends on these paid incentives, including a reported $3.6 billion in marketing spend. At a $40 billion valuation, investors would be paying about ten times that revenue figure for a platform whose organic demand is still hard to separate from subsidized demand. Kalshi did not respond to a request for comment.
The comparison with Polymarket sharpens the point. Polymarket’s growth has come mostly through its own token incentives and a US re-entry through a regulated venue, while Kalshi relies on cash rebates to traders. Either way, the sector’s headline volumes are partly a function of how much the platforms spend to attract them. When the incentives taper, the test is whether traders stay.
Regulatory picture remains mixed
Kalshi operates as a CFTC-designated contract market, which puts its event contracts under federal rather than state oversight. That advantage is not settled law. Disputes over whether some event contracts count as gambling under state legislation remain unresolved, and a Sixth Circuit ruling issued on September 25 added a new layer. State regulators in several jurisdictions have already moved to restrict event contracts on elections and sports. A pending Supreme Court case could hand individual states more authority over the business, a risk a Pitchbook analysis flagged when it put Kalshi’s potential worth at roughly $42 billion conditional on a favorable outcome.
Competition is also tightening. Polymarket is finalizing its own funding round at a $21 billion valuation led by 1798 Capital and is separately chasing about $1 billion in new capital. Kalshi’s edge for now rests on its federal regulatory status and its perpetual futures product, which helped drive the latest volume records.
For crypto-adjacent markets, the round is another sign that capital is flowing into regulated event trading rather than pure token speculation. Kalshi’s contracts on rates, elections, prices and crypto sit in the same attention economy that drives exchange volumes, and an IPO would give public investors their first direct exposure to that business.
The round is expected to close in the coming weeks. Whether the $40 billion number survives scrutiny depends on two things: how much of the record volume holds up once subsidies thin out, and how courts and state regulators treat event contracts over the next year. Both questions are open, and both will be priced in long before any IPO prospectus hits the SEC’s filing system.