Kalshi is in talks to raise new funding at a valuation of around $40 billion, nearly doubling the price investors agreed to in a financing round completed just last month, according to the Financial Times, which cited people familiar with the discussions. The company could close the latest round as soon as the third quarter, the report said. Kalshi declined to comment on the talks.
The discussions follow a $1 billion fundraising completed only weeks earlier that valued Kalshi at $22 billion. That round drew backing from investors including Coatue, Sequoia Capital, Andreessen Horowitz and Morgan Stanley. The proposed $40 billion valuation would roughly double the company’s worth again within a matter of weeks.
Rapid valuation and volume growth
The prospective deal would cap a steep increase in Kalshi’s valuation over the past year. The company was valued at about $5 billion earlier last year and at $11 billion in December, before the May round lifted its valuation to $22 billion. A close near $40 billion would mark another sharp step-up over a short period.
Trading activity on the platform has expanded alongside the rise in valuation. Kalshi generated more than $17 billion in trading volume last month, compared with less than $5 billion a year earlier. The platform recently surpassed $100 billion in lifetime notional volume, supported in part by heavy activity around the World Cup.
Competitive and regulatory pressures
The fundraising talks come amid heightened investor interest in the broader prediction market sector. Rival platform Polymarket has held early discussions about a potential funding round that could value it between $12 billion and $15 billion, according to the same source.
Kalshi also faces mounting regulatory and legal scrutiny. CME Group sued the Commodity Futures Trading Commission (CFTC) last week over the regulator’s approval of Kalshi’s perpetual futures, arguing that the contracts are swaps that should be subject to stricter rules. Several US states have taken action against the company as it has expanded.
In March, Arizona filed criminal charges accusing Kalshi of operating a gambling business without a license and of offering illegal wagers on elections. In February, a Massachusetts judge barred the company from offering sports markets in that state, citing public health and safety concerns. Kalshi is contesting both cases.
The company maintains that its event contracts should be regulated as derivatives by the CFTC, which is currently led by a Trump appointee, a classification that would allow it to avoid state gambling regulations. Sports wagers account for about 65% of Kalshi’s trading volume, and multi-leg combo bets have become popular since their rollout in September. Roughly two-thirds of bets placed on the platform lose money.
