Key facts
- Kalshi is reportedly in talks to raise funds at a $40 billion valuation.
- This valuation nearly doubles the $22 billion valuation from its recent $1 billion raise.
- The company's CEO indicated an IPO is unlikely before late 2027 or 2028.
- Kalshi faces legal challenges from states and a lawsuit from CME regarding its prediction market contracts.
- Roughly two-thirds of bets on Kalshi reportedly lose money.
Prediction market platform Kalshi is reportedly in discussions to secure new funding at a valuation of approximately $40 billion, according to the Financial Times. This potential valuation nearly doubles the $22 billion figure from its recent $1 billion funding round, which closed just last month and included investors like Sequoia Capital, Andreessen Horowitz, Coatue, and Morgan Stanley. The company's valuation has seen rapid growth, having been valued at around $5 billion in October 2025 and $11 billion by December.
Kalshi CEO Tarek Mansour indicated that an initial public offering (IPO) is under consideration but is not expected before late 2027 or 2028. The platform has experienced significant growth, reporting an annualized trading volume of $178 billion by April 2026, a 32-fold increase year-on-year.
However, Kalshi is also navigating a complex legal landscape concerning the regulation of prediction markets. The derivatives exchange CME has sued the CFTC over its approval of Kalshi's "perpetual" futures contracts. Simultaneously, several states are challenging these markets, viewing them as unlicensed gambling. Kentucky has filed a lawsuit against Kalshi and rival Polymarket, while Arizona and Massachusetts have taken separate actions. The CFTC has responded by suing Kentucky to prevent its enforcement actions. Donald Trump has emphasized the importance of federal authority over these markets, and his son, Donald Trump Jr., advises both Kalshi and Polymarket.
Conflicting legal rulings have emerged, with a Michigan federal judge ruling sports prediction markets are not swaps, while Kentucky alleges that sports contracts constituted 89% of Kalshi's 2025 trading volume. Reports suggest that approximately two-thirds of bets placed on Kalshi result in losses for the bettors.