(Reuters) -Kalshi said on Friday it had raised over $300 million in a new funding round led by Sequoia and Andreessen Horowitz, giving the predictions marketplace a valuation of $5 billion – more than double the mark it achieved about four months ago.
The latest financing comes as investor interest grows in prediction market platforms, which let users across the globe trade binary contracts on outcomes in politics, sports, economics and entertainment. This model has attracted strong backing for its innovative approach to event-based trading and risk management.
Prediction markets have, however, sparked debate in the financial circles with some experts highlighting prediction markets as superior to traditional polls, while others look at these markets as nothing more than “digital casinos” that introduce risk into financial markets.
The round in August also saw participation from returning crypto-focused investor Paradigm – which led Kalshi’s previous round where the startup raised $185 million at a $2 billion valuation.
Additional investors in the latest round include CapitalG, Coinbase Ventures, General Catalyst and Spark Capital.
The move follows Kalshi’s successful court challenge against the U.S. Commodity Futures Trading Commission, after which Kalshi gained approval to list contracts related to the presidential election earlier in the year.
“(Kalshi founders Tarek Mansour and Luana Lopes Lara) chose the difficult but more responsible path of becoming the first CFTC regulated prediction market, and their breadth of markets, liquidity, and infrastructure are built for scale,” said Alex Immerman, partner on a16z’s growth fund.
The company, founded in 2018, said on Friday that it set a new record in trading volume this week with over $1 billion trades on the platform. The platform is now also available in 140 countries.
Polymarket, Kalshi’s peer, received a $2 billion investment from the New York Stock Exchange’s owner earlier in the week, reflecting institutional interest in these event-driven markets.
(Reporting by Pritam Biswas in Bengaluru; Editing by Maju Samuel)
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