Kalshi, currently the biggest of the new prediction market platforms, has recently raised over $30 million. Just three months after its previous funding round, it has reached a soaring valuation of $5 billion, up from $2 billion. Of note, the company has been growing at a remarkable pace of late. It is now quite possibly on track to hit an astounding $50 billion in annualized trading volume. Skepticism aside, Tarek Mansour, the CEO of Kalshi, has been a key architect behind the company’s meteoric rise.
That funding round was co-led by Andreessen Horowitz and by Sequoia Capital, which has been a previous investor. This influx of capital not only underscores investor confidence in Kalshi’s business model but demonstrates the platform’s expanding reach. Kalshi currently allows consumers in 140 countries to engage in betting on various events, further solidifying its position in the global market.
Last year, Kalshi achieved a vital legal victory by successfully suing the Commodity Futures Trading Commission (CFTC). This victory affirmed the right of all Americans to access its platform, ensuring that Kalshi can continue to operate without aggressive enforcement actions in the U.S. market. This favorable court ruling has further supported Kalshi’s strong growth trajectory and made it a more attractive opportunity to investors.
For comparison, rival prediction market Polymarket recently raised a $1.8 billion round led by Founders Fund. Surprisingly, this generous funding is provided by Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange. At its last round, Polymarket’s pre-money valuation hit $8 billion, up dramatically from a $1 billion valuation in August. Polymarket has run into severe regulatory troubles not known by Kalshi. Since the start of 2022, it has been prevented from accepting U.S. citizens as customers because of a settlement agreement with the CFTC. The company is now set to reenter the U.S. market after acquiring a derivatives exchange and clearing house in July.
“Polymarket has been given the green light to go live in the USA by the CFTC,” said Shayne Coplan, CEO and founder of Polymarket, indicating optimism for the company’s future prospects as it navigates regulatory waters.
Kalshi and Polymarket became popular in the last lucrative year. They really grabbed the bull by the horns with their ground-breaking approaches to prediction markets, particularly for marquee events such as presidential elections. These two tech giants are locked in a heated battle for supremacy. In due course, their divergent regulatory climates and corporate approaches will shape their trajectories over the next few months and beyond.
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