Kalshi raises $1 billion at $40 billion valuation as it expands beyond prediction markets

By Pritam Biswas and Anirban Sen

Oct 29 (Reuters) - Kalshi has raised $1 billion in a new funding round that values the prediction-market startup at $40 billion, the company said on Thursday, as it pushes to expand beyond event contracts and compete more directly with traditional exchanges.

The fundraising comes as New York-based Kalshi seeks to expand beyond its prediction market roots in sports and elections to become a multi-asset trading platform. The move pits the startup against traditional exchange heavyweights such as CME Group CME.O and New York Stock Exchange parent Intercontinental Exchange ICE.N.

The round was co-led by Sequoia and Wellington. Tiger Global Management and Dragoneer Investment Group also took part, a source familiar with the matter said.

The financing comes just over five months after Kalshi raised another $1 billion in a Coatue-led round that valued the company at $22 billion. Its valuation has risen by nearly 82% since then.

In 2026, Kalshi moved into perpetual futures after the Commodity Futures Trading Commission approved the products. The company initially offered cryptocurrency perpetuals before expanding into equity indexes and metals.

Perpetual futures, often called "perps," are derivative contracts with no expiry date, allowing traders to hold positions indefinitely without rolling them over. They can also involve high leverage, increasing both potential gains and losses.

Critics of prediction-market platforms such as Kalshi and Polymarket argue that the products resemble gambling and could encourage addictive behavior.

Earlier this week, Utah's attorney general brought criminal charges against Kalshi and two senior executives, accusing the company of illegally promoting online gambling.

Prediction-market platforms have gained prominence since the last US presidential election. Kalshi has overtaken rival Polymarket in market share over the past year, according to Dune Analytics data, while Polymarket has faced delays with its U.S. platform launch and a CFTC probe.