Kalshi doubles valuation to $22b after $1b funding

Kalshi raised US$1 billion in a series F round led by Coatue Management, valuing the company at US$22 billion, about double the US$11 billion valuation it secured five months earlier.

Other investors in the round included Sequoia Capital, Andreessen Horowitz, IVP, Paradigm, Morgan Stanley, and ARK Invest.

Prediction markets have drawn more retail trading tied to politics, sports, and economic events.

Kalshi said its annualized trading volume rose from US$52 billion to US$178 billion in the past six months.

Its annual revenue run rate topped US$1.5 billion this month.

Kalshi and rival Polymarket have both raised large rounds in the past year.

🔗 Source: Bloomberg

🧠 Food for thought

Implications, context, and why it matters.

Kalshi’s valuation rises during a fight with regulators

Kalshi is fighting the Commodity Futures Trading Commission (CFTC) in federal court over political-event contracts, including contracts on which party controls Congress 1.
A district court sided with Kalshi. The case now moves through the U.S. Court of Appeals for the D.C. Circuit, while the CFTC is also writing separate rules on political event contracts under CFTC Regulation 40.11 2.
Kalshi also won early rulings that say federal derivatives oversight can override some state gambling laws for its CFTC-regulated event contracts.
A federal court stopped New Jersey from enforcing its laws against the platform. The Department of Justice and the CFTC also stepped in to block Arizona from using its gambling laws against Kalshi, including pending criminal charges 3.

Growth in event contracts raises insider trading concerns

Trading on specific outcomes creates more room for abuse. Kalshi has already penalized three political candidates for trading on their own races 4.
Congress has answered with more than 10 bills aimed at prediction markets, including proposals to bar certain government officials from trading some event contracts 5.
The CFTC has filed its first insider trading case tied to event contracts. It centers on an active-duty U.S. Army service member accused of trading Polymarket contracts with classified military intelligence about “Operation Absolute Resolve,” a military operation 5.
The CFTC expects Kalshi and other designated contract markets, exchanges approved to offer certain derivatives contracts, to act as the “first line of defense” against insider trading and market manipulation through surveillance and enforcement programs 5.