Kalshi is already angling for a much bigger price tag just weeks after a blockbuster funding round, the Financial Times reports. The prediction-market startup is in discussions to raise new capital at roughly a $40 billion valuation — nearly double the $22 billion it was valued at last month after a $1 billion raise led by backers including Sequoia, Andreessen Horowitz, Coatue and Morgan Stanley. The new round could close as soon as Q3.
A lightning-fast rise
- October 2025: ~$5 billion valuation
- December 2025: ~$11 billion
- May/June 2026: $22 billion after a $1B round
- Now: seeking ~ $40 billion
Growth and exit plans
Kalshi says it has seen explosive user activity: annualized trading volume hit $178 billion by April 2026, up 32x year‑on‑year. CEO Tarek Mansour told CNBC the company is “basically thinking about” an IPO, though he said it’s not likely this year. Media reporting suggests a listing wouldn’t be expected before late 2027 or 2028.
The legal storm over prediction markets
Kalshi’s valuation and growth are playing out against an escalating regulatory and legal fight over who can police prediction markets — federal regulators or individual states. Key developments:
- Product dispute: The CFTC approved Kalshi’s “perpetual” futures — contracts that let traders wager on crypto prices and compete with legacy derivatives players — a move Kalshi and the agency say places its event contracts under the CFTC’s exclusive swaps jurisdiction.
- Industry pushback: CME Group sued the CFTC last week over that approval, arguing it encroaches on CME’s products.
- State actions: Several states view many Kalshi markets, especially sports bets, as unlicensed gambling. Arizona filed criminal charges in March. A Massachusetts judge barred Kalshi’s sports markets in January. Nevada has extended a ban. Kentucky sued Kalshi and rival Polymarket this month, calling their platforms illegal sportsbooks.
- Federal counterpunch: The CFTC sued Kentucky this week to block enforcement — the agency’s ninth lawsuit against a state over prediction markets and its first against a state led by a Republican attorney general.
- Conflicting rulings: A Michigan federal judge recently ruled that sports prediction markets are not swaps. Former SEC and CFTC chair Gary Gensler has also filed a brief arguing the same. With contradictory rulings and active litigation in multiple states, the dispute looks headed for the Supreme Court.
Political ties and market risk
The fight has political overtones: former President Trump has framed federal oversight as “critically important,” and Donald Trump Jr. serves as an advisor to both Kalshi and Polymarket.
For investors weighing a $40 billion price tag, the legal outcomes matter materially. Kentucky alleges that 89% of Kalshi’s 2025 volume came from sports — the very business lines states are targeting — and the FT reports that roughly two-thirds of bets on Kalshi lose money. That mix of concentration in contested markets and high user losses raises regulatory and business risks that could shape Kalshi’s path to an IPO and its future in crypto-linked derivatives.
Bottom line: Kalshi’s valuation and growth story will be tested in courtrooms and regulatory filings as much as in the markets. The coming months could determine whether prediction markets scale under federal oversight or are carved up by state gambling laws — a decision with significant implications for crypto derivatives and the broader market.
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