Kalshi’s valuation reaches $22 billion following recent funding round, according to Bloomberg.

The recent $1 billion funding round demonstrates that interest in the challenged prediction market persists.

Kalshi, based in the United States, secured $1 billion, thereby doubling its valuation from December to $22 billion. (Zhenyu Luo/Unsplash/Modified by CoinDesk)

Key details:

• Kalshi Inc. successfully raised over $1 billion in a funding round spearheaded by Coatue Management, valuing the prediction market platform at $22 billion, which is double its valuation from December, as reported by Bloomberg.
• The swift expansion of the company has drawn significant investors, despite lawmakers examining potential risks associated with insider trading and market manipulation.
• Kalshi is encountering increasing opposition at the state level, including a prohibition in Nevada and criminal accusations in Arizona regarding unlawful gambling and election betting.

Kalshi Inc. garnered more than $1 billion in a funding round led by Coatue Management, as reported by Bloomberg on Thursday, citing sources familiar with the situation.

This funding round valued the prediction market platform at $22 billion, according to Bloomberg, which is double the valuation from the previous round in December when it also raised $1 billion. That earlier funding round was led by Paradigm, with contributions from established venture capital firms such as Sequoia Capital, ARK Invest, Andreessen Horowitz, and CapitalG, the growth-equity arm of Alphabet.

The New York-based firm opted not to provide comments when approached by CoinDesk.

This latest investment underscores investor enthusiasm in the rapidly expanding market, notwithstanding criticisms from legislators regarding insider trading and manipulation. In February, the trading volume on the platform surpassed $10 billion, representing a twelvefold increase compared to six months prior, as shown by KalshiData. Its primary competitor, Polymarket, has experienced similar growth, though it mainly operates outside the U.S. Currently, Kalshi’s annualized revenue stands at $1.5 billion, according to the Bloomberg report.

Kalshi, which is regulated as a financial exchange, provides contracts linked to the outcomes of various real-world events. Established in 2018, it gained significant traction after receiving approval to facilitate trading on the outcome of the 2024 U.S. presidential election. The firm is regulated by the Commodity Futures Trading Commission (CFTC), enabling it to operate nationwide under federal regulations, in contrast to traditional gambling firms that are accountable to state regulators.

Nevertheless, prediction market providers face resistance from over a dozen state actions, with state regulators asserting their jurisdiction over at least sports-related betting products.

Last month, Kalshi disclosed that it had identified and penalized two users for insider trading, including an editor associated with the popular social media figure MrBeast. At that time, the company also revealed it was investigating over a dozen active insider trading cases among 200 inquiries.

On Thursday, the Ninth Circuit Court of Appeals rejected Kalshi’s effort to prevent an anticipated temporary restraining order from Nevada, paving the way for a ban on its operations within the state. On Wednesday, Arizona filed 20 criminal charges against Kalshi, accusing it of running an illegal gambling operation and offering election wagering within the state.