Prediction market platform Kalshi has raised $1 billion in a new funding round that values the startup at $22 billion, marking the explosive growth of event-based trading markets as institutional investors increasingly treat them as a new financial asset class.
The Series F round, announced Thursday, doubles Kalshi’s valuation from the $11 billion mark it reached just five months ago during its previous fundraising.
The financing was led by Coatue, with participation from heavyweight technology investors including Sequoia, Andreessen Horowitz, and Paradigm.
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Kalshi said the fresh capital would be used to accelerate adoption among hedge funds, proprietary trading firms, asset managers, and insurance companies, a sign that prediction markets are evolving far beyond their early image as speculative retail betting platforms.
The company is also expanding institutional-focused products, including block trading services, broker integrations, and risk-management tools aimed at attracting large pools of capital.
“Kalshi is building the leading platform for trading in real-world events,” said Philippe Laffont, founder of Coatue. “Consumers have already embraced it, and we believe institutions will follow.”
The speed of Kalshi’s ascent has drawn comparisons to the early stages of the artificial intelligence boom, particularly as investors search for new high-growth financial technology sectors capable of generating large-scale network effects.
“There are few categories in recent history that have scaled this quickly outside of AI,” said Kalshi co-founder and CEO Tarek Mansour. “Event contracts could become a trillion-dollar market, and we’re still in the early stages of that transition.”
The company told Bloomberg that its annualized revenue has surpassed $1.5 billion, a figure that would place it among the fastest-growing financial technology firms globally.
Kalshi’s rise marks a broader transformation in financial markets, where investors are increasingly trading probabilities tied to political outcomes, economic indicators, weather events, corporate decisions, and geopolitical developments. Prediction markets allow users to buy and sell contracts tied to real-world outcomes, with prices effectively representing the market’s collective probability estimate of an event occurring.
Once viewed as niche products sitting somewhere between gambling and forecasting, prediction markets have gained growing legitimacy as sophisticated investors use them to hedge risks and gauge sentiment. The sector expanded dramatically during the U.S. election cycle and amid heightened geopolitical volatility linked to conflicts in the Middle East and global economic uncertainty.
Kalshi, alongside rival Polymarket, helped drive mainstream interest in the category by allowing users to trade on events ranging from election outcomes and central bank decisions to sports and pop culture moments.
Industry analysts say the rapid institutionalization of prediction markets could fundamentally alter how financial firms manage uncertainty. Instead of relying solely on traditional derivatives or macroeconomic models, firms are increasingly experimenting with event contracts as tools for pricing geopolitical risk, regulatory outcomes, and market-moving developments in real time.
Insurance companies, for example, could potentially use prediction markets tied to climate risks or natural disasters, while hedge funds may deploy them to hedge exposure to elections, wars, or monetary policy shifts.
That institutional interest appears to be accelerating quickly. Kalshi said trading activity from institutional clients has surged 800% over the past six months, while the company claims to account for roughly 90% of prediction market activity in the United States.
The firm’s regulatory positioning has also given it a significant advantage. Unlike some offshore competitors, Kalshi operates under oversight from the Commodity Futures Trading Commission, allowing it to legally offer event contracts in the U.S. market. That distinction became especially important after regulatory restrictions hampered Polymarket’s U.S. operations following a 2022 ban.
Still, the rapid growth of prediction markets is also drawing scrutiny from regulators and policymakers concerned about market manipulation, gambling risks, and the potential politicization of financial speculation. It is argued that highly liquid markets tied to elections, conflicts, or disasters could create incentives for disinformation campaigns or attempts to influence outcomes for financial gain.
While some warn that the blending of trading and entertainment could increase speculative behavior among retail users, particularly younger investors already active in cryptocurrency and meme-stock markets, others counter that prediction markets often aggregate information more efficiently than traditional polling or analyst forecasts, producing more accurate real-time probability assessments.
The debate is likely to intensify as companies like Kalshi expand deeper into institutional finance.