Kalshi, the prediction market exchange, has completed a $1 billion funding round that values the company at $40 billion, up from $22 billion in May and $5 billion a year earlier, the company announced Thursday.
The round was co-led by Sequoia Capital and Wellington Management. Kalshi said in a blog post that prediction markets were just the start as it seeks to build a broader financial exchange.
Kalshi has seen continued growth driven by events including the 2026 FIFA World Cup and the NFL season, both of which led to explosive growth in combo contracts similar to sportsbook parlays, as well as by increased trading on elections markets ahead of the U.S. midterms.
The company also faces legal headwinds over its sports offerings. Two U.S. appeals courts, in August and then September, ruled that states have the power to regulate sports-related event contracts, while Kalshi and other prediction market platforms argue the federal government has the right to do so. A third appeals court has ruled in favor of the federal argument, and a Supreme Court case will likely resolve the dispute.
In late May, Kalshi announced its first non-prediction market offering: perpetual futures, becoming the first exchange to bring the popular crypto trade to the U.S. Kalshi said it wants to use the new funds to develop leveraged event contracts, perpetual futures tied to individual stocks, and markets to trade on the price of compute. It also said it will use the funds to continue investing in its institutional business: in September, Kalshi said it worked with 500 institutional entities, and that excluding market makers those represented 25% of the platform's total trading volume.
CEO Tarek Mansour said on CNBC's "Squawk Box" in June that the company was considering a move to the public markets, though it would not come until 2027. "A company of our financial profile with the rate of growth that we're seeing, that sort of conversation has to happen," he said.
Disclosure: CNBC and Kalshi have a commercial relationship that includes customer acquisition and a minority investment.
Analysis
Why This Matters
- Kalshi’s valuation jump reflects surging investor appetite for prediction markets and event-based trading.
- The company’s expansion into perpetual futures and compute markets signals a push beyond election and sports betting toward a full financial exchange.
- The unresolved regulatory split over sports contracts, states vs. federal authority, has major implications for the entire prediction market industry and may be settled by the Supreme Court.
Background
Kalshi launched in 2018 as a regulated U.S. prediction market exchange, allowing users to trade contracts on outcomes of events such as elections, economic data releases and sports. It grew rapidly through the 2020 and 2022 election cycles and added its first non-prediction product, perpetual futures, in May 2026. The company’s private valuation has climbed from $5 billion in October 2025 to $40 billion in less than a year.
Key Perspectives
- U.S. appeals courts: Ruled that states have the power to regulate sports-related event contracts.
- Kalshi: Believes the federal government has the right to regulate such contracts; a third appeals court has backed that argument.
- CEO Tarek Mansour: Has said Kalshi is considering an IPO but likely not before 2027.
What to Watch
- A Supreme Court decision on whether the federal government or states regulate sports event contracts.
- Kalshi’s launch of leveraged event contracts and compute price markets, and how regulators respond.
- Any movement toward an IPO or public listing in 2027.
Checked
12 claims in this story checked against 1 source: 12 supported.
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- SupportedKalshi’s valuation rose to $40 billion in its latest funding round.US Top News and Analysis: “Kalshi has completed a $1 billion funding round that values the prediction market exchange at $40 billion, the company announced on Thursday.”
- SupportedKalshi plans to develop leveraged event contracts and markets to trade on compute prices.US Top News and Analysis: “It wants to use the new funds to develop leveraged event contracts, perpetual futures tied to individual stocks and markets to trade on the price of compute.”
- SupportedThe $1 billion funding round was co-led by Sequoia Capital and Wellington Management.US Top News and Analysis: “The latest round was co-led by Sequoia Capital and Wellington Management.”
- SupportedKalshi announced the completed $1 billion round on Thursday.US Top News and Analysis: “Kalshi has completed a $1 billion funding round that values the prediction market exchange at $40 billion, the company announced on Thursday.”
- SupportedThe $40 billion valuation is up from $22 billion in May and $5 billion in October 2025.US Top News and Analysis: “That valuation comes after it completed its previous funding round in May, where it was valued at $22 billion. […] as just in October 2025 the company was valued at only $5 billion.”
- SupportedThe 2026 FIFA World Cup and NFL season drove explosive growth in combo contracts.US Top News and Analysis: “That has been driven by events like the 2026 FIFA World Cup, the NFL season — both leading to explosive growth of combo contracts, similar to parlays on sportsbooks”
- SupportedKalshi saw increased trading on election markets ahead of the U.S. midterms.US Top News and Analysis: “and increased trading on elections markets ahead of the U.S. midterms.”
- SupportedTwo U.S. appeals courts ruled in August and September that states could regulate sports-related event contracts, while Kalshi and other platforms argued for federal authority.US Top News and Analysis: “Two U.S. appeals courts — in August and then September — ruled that states have the power to regulate sports-related event contracts, while Kalshi and other prediction market platforms believe the federal government has the right to do so.”
- SupportedA third appeals court ruled for the federal argument, and a Supreme Court case will likely resolve the dispute.US Top News and Analysis: “A Supreme Court case will likely solve the dispute, as a third appeals court has ruled in favor of the latter argument.”
- SupportedIn late May, Kalshi announced perpetual futures as its first non-prediction-market offering and was the first exchange to bring the crypto trade to the U.S.US Top News and Analysis: “Kalshi also announced in late May its first non-prediction market offering, perpetual futures, being the first exchange to bring the popular crypto trade to the U.S.”
- SupportedKalshi said it worked with 500 institutional entities in September, which, excluding market makers, represented 25% of the platform’s total trading volume.US Top News and Analysis: “Kalshi said in September it worked with 500 institutional entities, and that excluding market makers those represented 25% of the platform's total trading volume.”
- SupportedCEO Tarek Mansour said on CNBC’s “Squawk Box” in June that Kalshi was considering going public, though not until 2027, and said: “A company of our financial profile with the rate of growth that we're seeing, that sort of conversation has to happen,”US Top News and Analysis: “In an appearance on CNBC's "Squawk Box" in June, CEO Tarek Mansour said the company was considering a move to the public markets, though it wouldn't come until 2027. "A company of our financial profile with the rate of growth that we're seeing, that sort of conversation has to happen," he said.”