Kalshi is reaching new heights after a fresh injection of capital.
The New York-based prediction market reportedly announced on Wednesday the closing of a $185 million Series C funding round valuing the company at approximately $2 billion.
The funding round was led by venture capital firm Paradigm with contributions from Sequoia Capital, Multicoin Capital, VC firm Neo and Bond Capital. Citadel Securities CEO Peng Zhao also participated in the funding round as an individual investor.
“Prediction markets remind me of crypto 15 years ago: a new asset class on a path to trillions,” Paradigm co-founder and managing partner Matt Huang told TechCrunch. “There’s no better team than Kalshi to scale prediction markets and reshape how people think about everything from elections and economic markets to weather and sports.”
Kalshi’s valuation surpasses a competitor
Kalshi’s valuation comes after another prediction market announced a funding round.
Crypto-focused derivatives exchange Polymarket is reportedly completing a $200 million funding round that will value the company at roughly $1 billion. The round is being led by a fund operated by billionaire and former PayPal CEO Peter Thiel.
Polymarket is not regulated in the U.S. and does not officially accept American customers.
Earlier this month, the company secured a partnership with X, formerly Twitter. The deal makes Polymarket the official prediction market partner of the social media platform.
Kalshi files multiple lawsuits
Kalshi’s latest valuation comes as the company handles lawsuits and regulatory orders.
Nearly 10 states have sent Kalshi cease and desist orders due to its event contracts on sports and other markets. The event contracts are drawing the attention of lawmakers and regulators due to concerns over their similarity to regulated online wagering. States that have issued Kalshi cease and desist orders include Arizona, New Jersey, Maryland, Illinois and Nevada. Kalshi responded to several orders by taking legal action.
Kalshi filed lawsuits in Nevada, New Jersey and Maryland. Earlier this month, a federal court dismissed several parties’ motion to dismiss the lawsuit Kalshi filed in Nevada.
Kalshi argues that the Commodity Futures Trading Commission has federal authority over event contracts through the Commodity Exchange Act superseding state law.
In New Jersey, the prediction market was granted a temporary injunction allowing it to operate in the Garden State. The decision was made by a New Jersey district court and it is being appealed by the state’s Attorney General Matthew Platkin and Division of Gaming Enforcement Director Mary Jo Flaherty. The appeal will be heard in the Third Circuit Court. The filing in the lower court allows parties to file an amicus brief to share their reasoning as to why the court should make a certain decision.
Kalshi’s suit in Maryland is drawing interest from federally recognized tribes. A coalition of tribes filed a motion for leave to file an amicus brief in Kalshi’s suit against state regulators.
The prediction market responded to the motion for leave by saying the tribes missed a deadline as amicus briefs are typically filed within seven days of an initial suit unless a court decides otherwise. Kalshi is seeking a preliminary injunction against the Maryland Lottery to operate in the state after receiving a cease and desist order from the regulator.
