Kalshi and Polymarket Target $20B as U.S. Scrutiny Grows
- Kalshi and Polymarket are now weighing fresh rounds at $20 billion in valuations.
- Investor demand stays firm even as both platforms face rising U.S. scrutiny now.
- Lawmakers are seeking tighter limits as prediction market activity expands further.
Prediction-market platforms Kalshi and Polymarket are exploring fundraising rounds that could value each company near $20 billion as competition for users intensifies. Discussions with investors remain preliminary and may not lead to deals, according to people familiar with the matter cited by The Wall Street Journal. Both firms previously carried valuations near half that level late last year.
The talks emerge as the companies expand rapidly and attract new users. At the same time, lawmakers and regulators are reviewing how prediction markets operate and what limits may apply.
Meanwhile, both companies continue aggressive growth strategies across advertising campaigns and partnerships. The potential valuations signal strong investor interest in platforms that allow users to trade on the outcomes of real-world events.
Fundraising Talks Target Major Valuations
Kalshi and Polymarket recently held conversations with potential investors regarding funding rounds that could value each company close to $20 billion. Sources familiar with the discussions told The Wall Street Journal the talks remain early and may not result in agreements.
Furthermore, the final valuation could shift as scrutiny of prediction markets increases. Investors and companies often adjust expectations during early negotiations. Kalshi currently operates in the United States and allows users to trade contracts on real-world events. Markets include sports outcomes, political developments, economic indicators, and pop-culture events.
The company raised $1 billion in December. Investors included Paradigm and Sequoia Capital. That round valued Kalshi at about $11 billion. According to people familiar with the company’s finances, Kalshi recently crossed a $1 billion revenue run rate. One source said the annualized estimate now sits closer to $1.5 billion.
Related: Polymarket and Kalshi Aim Billions After Regulatory Approval
Kalshi was founded in 2018 by Tarek Mansour and Luana Lopes Lara. In 2020, the Commodity Futures Trading Commission approved Kalshi as the first regulated exchange offering event-based trading markets. The platform allows contracts tied to outcomes ranging from the Super Bowl winner to political leadership changes inside government.
Polymarket Expands While Planning U.S. Entry
Polymarket operates differently because U.S. users cannot legally access the platform. Its terms of service prohibit U.S. traders, although some users attempt access through VPN services. The company also uses geoblocking tools to restrict access. Despite these limitations, Polymarket remains widely used in global prediction markets.
Polymarket plans to launch a regulated version of its platform in the United States later this year. The domestic product would comply with local regulations. The company reached a $9 billion valuation in October after Intercontinental Exchange, the owner of the New York Stock Exchange, agreed to invest up to $2 billion. PitchBook reported the investment details.
Shayne Coplan founded Polymarket in 2020. The platform later formed a data partnership with Dow Jones, publisher of The Wall Street Journal. The partnership supports information distribution related to market activity and event forecasting.
Lawmakers and Regulators Increase Scrutiny
Despite strong growth, prediction markets now face greater oversight from policymakers. Both Kalshi and Polymarket recently faced criticism related to specific markets offered on their platforms. Users placed wagers on events including a possible U.S. military strike on Iran and the removal of Iran’s Supreme Leader, Ayatollah Ali Khamenei.
Lawmakers responded with new legislative proposals. U.S. Representatives Blake Moore of Utah and Salud Carbajal of California introduced legislation that would restrict markets tied to war and sports.
Meanwhile, marketing strategies aimed at college students also raised concerns. The Wall Street Journal previously reported aggressive outreach toward university groups. In one instance, Polymarket reportedly gave a fraternity thousands of dollars in exchange for recruiting new users to its platform.
The same report described unusual trading activity linked to a fraternity connected to Jeff Bezos’ stepson. Members placed a series of wagers on Bezos’ location during the Super Bowl. Both companies continue to advertise widely on social media. They also maintain partnerships and promotional campaigns targeting new users.
