Prediction marketplace Kalshi has reached a $22 billion valuation after closing a $1 billion Series F funding round, underscoring growing venture capital appetite for prediction markets amid surging retail adoption.

The new valuation doubles Kalshi’s worth from just five months ago. The funding round was led by Coatue Management, with participation from Andreessen Horowitz, Sequoia Capital, Morgan Stanley and Ark Invest.

The raise comes as investors increasingly view prediction markets as one of the fastest-growing segments of digital finance. Andreessen Horowitz’s crypto unit, a16z crypto, recently raised $2.2 billion for its latest fund and identified prediction markets as a major investment theme.

Kalshi has emerged as one of the industry’s dominant platforms. A company spokesperson told Bloomberg that Kalshi’s annualized revenue run rate has surpassed $1.5 billion.

Unlike rival Polymarket, which operates on decentralized blockchain infrastructure, Kalshi runs a centralized and federally regulated marketplace that allows users to trade on the outcomes of real-world events, including elections, economic data releases and sports. 

Together, Kalshi and Polymarket accounted for the bulk of the more than $25 billion in prediction market trading volume recorded last month.

Prediction market volumes by platform. Source: Bitget Wallet

Kalshi has also expanded its crypto ambitions. The company recently appointed John Wang as its head of crypto, and he told Forbes that, “We would like to have Kalshi’s prediction markets in every large crypto app.”

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Regulatory scrutiny intensifies as prediction markets expand

The latest wave of venture backing comes as Wall Street analysts argue that prediction markets are evolving beyond retail speculation into institutional financial tools.

In a recent research note, Bernstein said prediction markets are entering an “institutional era,” driven by demand for bespoke block trades and custom event contracts that allow firms to hedge against specific macro and geopolitical risks.

At the same time, the sector faces mounting legal and political scrutiny in the United States.

According to NPR, Kalshi is involved in at least 19 federal lawsuits over whether its event contracts violate state gambling laws.

States including Massachusetts, New Jersey, Arizona, Nevada, Illinois and Connecticut have challenged Kalshi’s operations, arguing that some of its sports and event-based contracts amount to unlicensed gambling.

The political pressure has also intensified in Washington. Democratic lawmakers have called for tighter oversight of prediction markets following concerns over “suspicious trades” tied to geopolitical events.

Source: Stephanie Cutter

In response, Kalshi has expanded its policy and regulatory bench. The company recently brought on former Obama staffer Stephanie Cutter as a policy adviser, a move widely seen as an effort to strengthen its relationships in Washington and navigate the growing scrutiny surrounding prediction markets.

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