The prediction market giant is in talks to close a fresh raise as early as Q3 2026, as trading volume soars, crypto derivatives expand, and a Supreme Court battle over federal versus state jurisdiction looms
Prediction market platform Kalshi is in advanced discussions to raise fresh capital at a valuation of approximately $40 billion, according to a Financial Times report published Wednesday citing people familiar with the matter. The round could close as soon as the third quarter of 2026, and if completed, would widen Kalshi’s lead over rival Polymarket, which has been seeking funding at a $15 billion valuation.
The figure represents an extraordinary repricing: Kalshi was valued at around $5 billion in early 2025, hit $11 billion by December 2025, reached $22 billion in May 2026, and is now targeting $40 billion — an eightfold increase in roughly 18 months.
A Raise That Barely Had Time to Land
The new talks come just weeks after Kalshi completed a $1 billion Series F raise led by Coatue, with participation from Sequoia Capital, Andreessen Horowitz, IVP, Paradigm, Morgan Stanley, and ARK Invest. That round itself had barely closed before the company was reportedly back at the table. The speed of the mark-up has stunned even observers accustomed to hypergrowth valuations in fintech. Kalshi was valued at $2 billion after a $185 million Paradigm-led round in June 2025 — meaning its valuation has grown roughly 20x in about a year.
Kalshi declined to comment on the latest financing discussions.
The Numbers Behind the Valuation
The investor appetite is being driven by tangible growth metrics. Monthly trading volume on the platform recently surpassed $17 billion, up from less than $5 billion during the same period a year prior — more than a threefold increase in twelve months. During its May funding announcement, Kalshi cited an annualized trading volume of $178 billion and reported total cumulative fundraising of $2.685 billion across five rounds since June 2025.
Revenue has kept pace. The platform surpassed $2 billion in annualized revenue, according to a report from The Information published last week. That figure represents, according to Cryptopolitan, nearly three times Kalshi’s annualized revenue in November 2025.
Sports contracts have been the primary engine. Sports event contracts have been Kalshi’s leading driver of revenue, particularly around the NBA playoffs and the FIFA World Cup. During the first week of the World Cup, Kalshi posted $5.1 billion in total volume — its largest weekly amount ever for a single prediction marketplace. Sports-related contracts now account for roughly 65% of total platform volume.
Polymarket, Polymarket US and Kalshi Volume (Monthly) (Source: The Block)
New Products, New Frontiers
Kalshi has also moved beyond its original event-contract model. The company launched crypto perpetual futures regulated by the CFTC on June 3, with those contracts reaching $5.5 billion in volume through their first two weeks. The launch marks a direct incursion into territory long dominated by incumbent exchanges — and has already provoked legal pushback. CME Group filed suit against the CFTC, arguing the regulator exceeded its authority in approving Kalshi’s perpetual futures contracts, which compete with CME’s own widely traded Wall Street products.
Multi-leg “combo” contracts have also emerged as a major growth driver. Introduced in September 2025, they function similarly to parlays or accumulators and have proved wildly popular with Kalshi’s user base.
The Legal Battleground
Kalshi’s ascent is unfolding against an intensifying legal war between federal and state authorities over jurisdiction. The company argues all of its event contracts are derivatives regulated exclusively by the CFTC. The CFTC itself has sued nine states to block their enforcement actions against Kalshi, with CFTC Chairman Michael Selig stating: “If you interfere with the operation of federal law in regulating financial markets, we will sue you.”
States aren’t backing down. Arizona filed criminal charges in March, a Massachusetts judge barred Kalshi’s sports markets in January, and Kentucky sued Kalshi and rival Polymarket in June, accusing them of running illegal sportsbooks. Kalshi also filed a federal lawsuit against Illinois officials targeting SB 3019, a law that would require prediction market operators to obtain a state gaming license effective July 1, arguing the measure violates the Supremacy Clause.
The stakes for investors are real. Kentucky’s attorney general alleged that nearly 89% of Kalshi’s trading activity was tied to sports betting and that the company generated over $23 billion in sports contract volume in 2025. Those are precisely the contracts states are trying to regulate or ban. The jurisdictional dispute between the CFTC and state gambling regulators is widely expected to eventually reach the Supreme Court.
Polymarket Active Traders (Monthly) (Source: The Block)
IPO on the Horizon
Fundraising talks are running in parallel with early-stage IPO planning. Kalshi’s CEO Tarek Mansour confirmed the company is considering a public listing, though he said it will not take place this year. Mansour told CNBC: “A company of our financial profile with the rate of growth that we’re seeing, that sort of conversation has to happen. People start asking that question. And we’re basically thinking about it.” The Financial Times has reported that a listing is unlikely before late 2027 or 2028.
Whether a $40 billion valuation ultimately proves prescient or premature will depend heavily on how the Supreme Court resolves the question of who gets to regulate prediction markets — federal derivatives law or state gambling statutes. For now, Wall Street’s biggest names are betting on Kalshi.
