Polymarket has launched a new category of prediction markets tied to private companies, allowing users to trade on questions related to pre-IPO companies — a move that could bring greater price discovery to private markets, where valuation data is often limited and opaque.

The new offering, announced Tuesday, was developed in partnership with Nasdaq Private Market, a platform that facilitates secondary trading in shares of privately held companies. Nasdaq Private Market will provide the underlying data and market infrastructure for the contracts.

The markets are designed to reflect expectations around events such as fundraising rounds, valuation changes and other corporate milestones involving startups and late-stage private companies. The launch expands Polymarket’s product lineup beyond its core markets focused on politics, macroeconomic events and public companies.

Source: Cointelegraph

The move is part of Polymarket’s effort to broaden its appeal to financially oriented users and extend prediction markets into private capital markets, where pricing information is often less accessible and less transparent than in public equities.

Polymarket said the rise of so-called unicorns — privately held startups valued at $1 billion or more — has increased demand for market-based forecasting tools tied to private companies. The platform noted that there are nearly 1,600 unicorns worldwide with a combined valuation exceeding $5 trillion, despite access to these companies remaining largely limited to private investors.

Related: Jump Trading eyes Kalshi, Polymarket stakes as institutional interest grows: Report

Prediction markets draw growing institutional interest

Polymarket’s partnership with Nasdaq Private Market reflects the broader institutionalization of prediction markets, as private company data and event-based contracts gain traction among professional investors.

Retail traders still account for the vast majority of activity. An April report by Bitget Wallet and Polymarket found that retail traders generated 80% of prediction market volume.

Prediction market trading volume in March. Source: Bitget Wallet

Still, Wall Street analysts say institutional participation is increasing as the US regulatory environment becomes more supportive and market infrastructure improves.

Bernstein recently pointed to the first institutional block trade on Kalshi as a milestone for the sector. Block trades are privately negotiated transactions, typically executed by large investors to move significant positions without disrupting the broader market.

Related: SEC delays prediction market ETFs over mechanics and risk concerns: Report