Kalshi's Crystal Ball: Prediction Market Whiz Eyes $40B Valuation, Doubling Down on Itself 🪙

Kalshi, the New York-based prediction market platform, is in talks to raise fresh capital at a valuation of approximately $40 billion, with the round potentially closing as soon as the third quarter of 2026, according to a Financial Times report. The figure would nearly double the $22 billion valuation Kalshi reached just last month, when it closed a $1 billion Series F led by Coatue Management with participation from Sequoia Capital, Andreessen Horowitz, IVP, Paradigm, Morgan Stanley and Ark Invest.

The proposed $40 billion valuation caps a rapid climb for the company, which was worth around $5 billion in October 2025 and $11 billion by December. If completed, the round would value Kalshi at eight times its October 2025 mark, a trajectory driven by the growth of the regulated event-contract trading space in the United States. The valuation would also exceed Polymarket's last reported $15 billion valuation from April.

Kalshi has expanded aggressively, recently debuting perpetual futures tied to Near, Zcash, Shiba Inu, Dogecoin, $BTC, $ETH and $XRP. The company has said it now generates $1.5 billion in annualized revenue while serving 2 million monthly users, capturing 90% of U.S. prediction market activity. As of May, Kalshi's monthly notional trading volume reached $17.9 billion compared with Polymarket's $7.1 billion, according to Token Terminal data, and Kalshi reported an annualized trading volume of $178 billion by April 2026, up 32x year-on-year. CEO Tarek Mansour told CNBC on Wednesday that Kalshi is "basically thinking about" an IPO, though not this year, with The Information reporting a listing is unlikely before late 2027 or 2028.

The platform's rise has drawn new competitors, with Cboe Global Markets launching Cboe Predicts on Tuesday, debuting with binary contracts tied to the S&P 500, and Meta CEO Mark Zuckerberg reportedly directing staff to build a prediction markets mobile app called "Arena." The sector is also caught in an escalating legal fight between state and federal regulators over jurisdiction. Kentucky sued Kalshi and Polymarket last week, accusing them of operating "unlicensed and illegal sports betting and gambling platforms," while the U.S. Commodity Futures Trading Commission sued Kentucky on Tuesday to block its enforcement, the ninth state the agency has taken to court and the first led by a Republican attorney general. Derivatives giant CME also sued the CFTC this month over its approval of Kalshi's perpetual futures, which compete with CME's own products, and a Michigan federal judge recently ruled that sports prediction markets are not swaps, a position echoed in a brief filed by former CFTC and SEC chair Gary Gensler.