The American prediction market platform Kalshi recently completed a new Series C funding round, raising a substantial $185 million, which boosted its valuation to $2 billion, making it one of the most notable "unicorns" in the field. This funding round was led by Paradigm, a venture capital firm focused on the crypto sector, with follow-on investments from Sequoia Capital, Neo, Bond Capital, and Citadel Securities CEO Zhao Peng, indicating strong confidence from both traditional and crypto capital in the future of prediction markets.
Kalshi CEO Tarek Mansour stated on social media platform X that the key to attracting talent is not the amount of funding, but the grand vision of "building the world's most important financial market."
The announcement of this funding round comes at a time when competition in the prediction markets is heating up. Just a day before Kalshi announced its funding, its competitor Polymarket was reported to be close to completing a funding round supported by "Silicon Valley godfather" Peter Thiel's founder fund, exceeding $200 million, with its valuation nearing $1 billion. Despite operating in a legal "gray area" in the US, Polymarket's transaction volume during last year's US presidential election exceeded $2.5 billion, reflecting significant user demand in prediction markets.
Both Kalshi and Polymarket recently launched prediction contracts related to the New York City mayoral primary. According to Kalshi's contract, the final winner, State Senator Zohran Mamdani, had a winning probability of 99%, defeating former New York Governor Andrew Cuomo in a "political upset."
Meanwhile, social platform X (formerly Twitter) established a partnership with Polymarket in June this year, announcing it as the platform's official prediction market partner. X CEO Linda Yaccarino said that Polymarket's market mechanisms have become a tool for users to obtain real-time information, and the company hopes to enhance user experience through more technological integration.
Kalshi is also actively expanding its prediction themes, launching its first NFL regular season contracts this spring and planning to delve deeper into sports events. However, some of its "event-based contracts" have sparked regulatory controversies, with the New Jersey Attorney General's office issuing a cease and desist order, demanding a halt to related products.
In response to external skepticism, Kalshi has consistently emphasized that all its contracts operate under the license of the US Commodity Futures Trading Commission (CFTC). CFTC chair nominee Brian Quintenz supported this interpretation during a Senate hearing, stating that the Commodity Exchange Act applies to any contract involving economic outcomes. Despite this, some members of Congress and tribal representatives remain concerned about the compliance of prediction markets, fearing that they may circumvent the Indian Gaming Regulatory Act and infringe on tribal sovereignty.
The debate over the legality of prediction markets has also entered the legal arena. On June 19, the Native American Tribal Alliance sued Kalshi in New Jersey, claiming its prediction products constitute illegal gambling under CFTC prohibition clause (Rule 40.11(a)), and threaten the gambling agreements between the state and tribes.
The CFTC had originally planned to hold a roundtable on prediction market regulation this spring, but it was canceled for unspecified reasons, with a promise to reschedule. The uncertainty in regulatory movements adds variables to the future development of platforms like Kalshi.
Despite facing regulatory challenges, Kalshi's $2 billion valuation and substantial funding send a strong signal: prediction markets are becoming a new "financial infrastructure" sought after by capital, and Kalshi is striving to be a central node in this revolution.
