Prediction market platform Kalshi raises $185M at $2B valuation

Kalshi, a regulated U.S.-based prediction market platform, has secured a significant $185 million funding round led by crypto-centric venture capital firm Paradigm, bringing its post-money valuation to $2 billion. The deal, confirmed by both Kalshi and Paradigm to TechCrunch, marks one of the biggest milestones to date in the prediction market space—a financial sector still carving out its place between traditional betting and securities trading.

Paradigm co-founder Matt Huang drew parallels between the potential of prediction markets and the early days of cryptocurrency, calling them “a new asset class on a path to trillions.” Huang praised Kalshi’s team as the ideal group to lead the mainstreaming of prediction markets across topics like elections, economics, sports, and weather.

The announcement comes as the broader prediction market sector experiences a flurry of investment activity. Just a day earlier, Bloomberg reported that Kalshi’s top rival, Polymarket, is finalizing a $200 million funding round led by Founders Fund. That round would reportedly value Polymarket at approximately $1 billion pre-money—a notably lower valuation multiple compared to Kalshi’s, given the respective round sizes.

The discrepancy in valuations reflects more than just financial performance; it underscores the diverging regulatory paths the two platforms have taken.

While Kalshi fought for and won regulatory approval from the Commodity Futures Trading Commission (CFTC), allowing it to operate freely for U.S. residents, Polymarket took a different route. In 2022, Polymarket agreed to ban U.S. users following CFTC enforcement action, effectively locking itself out of the world’s largest financial market. Today, the platform remains restricted not just in the U.S. but also in a host of other jurisdictions, including the U.K., France, Singapore, and parts of Canada.

That regulatory burden likely weighs heavily on institutional investors. Kalshi, by contrast, now boasts the trust of both government oversight and a large pool of users within the U.S., making it a more attractive and de-risked proposition for venture capitalists.

However, Polymarket isn’t backing down. The company recently announced a partnership with Elon Musk’s X, dubbing itself the platform’s “official” prediction market. Though specifics remain vague, the partnership hints at broader ambitions—and perhaps a calculated bet on a possible shift in regulatory attitudes under a future Trump administration, known for its more crypto-friendly stance.

Still, in the current regulatory climate, Kalshi’s strategy appears to be paying off. While unregulated platforms like Polymarket may appeal to libertarian-leaning crypto natives, Kalshi's alignment with U.S. regulators has won over more cautious, long-term capital.

As both companies race to redefine how we speculate on real-world outcomes—from politics to pop culture—Kalshi now has both the war chest and the regulatory green light to scale its vision. Whether that leads to the trillion-dollar asset class Matt Huang envisions remains to be seen—but the stakes are clearly rising.