Kalshi raises $1 billion at $40 billion valuation as prediction market giant expands into financial trading

Kalshi has raised $1 billion in fresh funding at a staggering $40 billion valuation, marking another milestone in the prediction market company’s rapid rise. But the bigger story isn’t the money. Kalshi is moving beyond betting on elections and sporting events to compete directly with some of Wall Street’s biggest financial exchanges.

The New York-based prediction market startup announced the Series G financing on October 29, with Sequoia Capital and Wellington Management co-leading the round. Other investors included Andreessen Horowitz, Coatue, Baillie Gifford, CapitalG, Morgan Stanley Investment Management, and several major trading firms.

“Today, we’re announcing a $1 billion Series G at a $40 billion post-money valuation, co-led by Wellington and Sequoia. Joining them are Baillie Gifford, Stripes, Andreessen Horowitz, Coatue, Layer Global, Morgan Stanley Investment Management, Sequoia Global Equities, CapitalG, Hudson River Trading, and Balyasny Asset Management,” Kalshi said in a blog post.

The latest investment comes just five months after Kalshi secured another $1 billion at a $22 billion valuation. That represents an extraordinary 82% increase in valuation in less than six months. In December 2025, the company was valued at $11 billion.

The rapid increase reflects investors’ growing conviction that prediction markets could become a major category within global finance.

Founded in 2018 by MIT graduates Tarek Mansour and Luana Lopes Lara, Kalshi began with a relatively simple idea: let people trade contracts tied to real-world events, from election results and economic indicators to weather forecasts and sporting outcomes.

Now, with billions in funding and a growing institutional customer base, Kalshi wants to become something much bigger.

From prediction markets to a $1 trillion trading platform

Kalshi says its annualized trading volume has surpassed $1 trillion across prediction markets, cryptocurrency, commodities, and perpetual futures. The company reports more than 30 million accounts created on its platform and claims over 75% of prediction market trading volume.

The distinction between trading volume and revenue matters. The $1 trillion figure represents annualized transaction activity, not money earned by Kalshi.

The company says its non-sports business now generates more than $1 billion in annualized revenue. Its commodities operations have reached over $100 million in annualized trading fees in three months, and cryptocurrency trading volume has climbed to an annualized $140 billion.

Kalshi’s perpetual futures business has recorded $83 billion in trading volume since launching several months ago, attracting more than 500,000 traders.

Reuters reported that Kalshi’s move into perpetual futures followed approval from the Commodity Futures Trading Commission. These contracts have no fixed expiration date and can involve significant leverage, exposing traders to potentially substantial losses.

That expansion places Kalshi in more direct competition with established financial exchange operators, including CME Group and Intercontinental Exchange, the parent company of the New York Stock Exchange.

Institutional interest is growing, too. Kalshi says approximately 500 institutional entities participated on its platform in September. Excluding market makers, those participants accounted for roughly 25% of total exchange trading volume.

The company plans to use its latest funding to introduce new financial products, including stock-linked perpetual futures, indices, and markets tied to computing costs. International growth is another priority, particularly in Europe and Latin America.

Kalshi’s biggest challenge may be regulation, not competition

For all its financial momentum, Kalshi faces a difficult legal question: Are prediction markets legitimate financial exchanges or a new form of online gambling? That debate has become increasingly contentious as sports contracts attract millions of traders.

WIRED reported earlier this year that Nevada temporarily restricted Kalshi’s sports, election, and entertainment contracts following a court order. State regulators argue that certain event contracts fall under gambling laws, rather than federal derivatives rules.

The dispute has escalated.

According to Reuters, Utah’s attorney general filed criminal charges against Kalshi and two senior executives this week, accusing the company of illegally promoting online gambling.

Kalshi maintains that its contracts are federally regulated financial instruments, with participants trading against one another rather than betting against a sportsbook. The decision could determine how far its business can grow.

In a March interview with WIRED, Mansour defended the company’s model, arguing that prediction markets offer a different structure from traditional gambling platforms.

The stakes extend beyond Kalshi. Rival Polymarket and other prediction market operators face similar questions about regulatory oversight, consumer protection, and the legal boundaries of event-based trading.

For investors, Kalshi’s $40 billion valuation represents a major bet that financial markets are ready for a new generation of exchanges.

Its technology, growing trading activity, and institutional relationships show demand. But valuation alone cannot settle the regulatory disputes or guarantee that trading growth will translate into sustainable profits.

Kalshi has already convinced investors that prediction markets can become a multibillion-dollar business. Its next challenge is to prove it can become the foundation of a lasting financial exchange.

Kalshi founders