Summary
- Kalshi is in discussions to secure funding at a valuation of approximately $40 billion, as reported by the Financial Times, nearly doubling its previous $22 billion valuation from last month’s $1 billion fundraising.
- CEO Tarek Mansour mentioned to CNBC that the company is "considering" an IPO but has ruled out a public offering in 2026, with potential plans for 2027 or 2028.
- This funding effort comes amid a growing legal dispute in the U.S. regarding whether prediction market contracts for sports are classified as CFTC-regulated derivatives or illegal gambling.
Kalshi, a prediction market platform, is reportedly looking to raise additional funds at a valuation nearing $40 billion, according to the Financial Times. This new funding round could conclude as early as the third quarter and would significantly increase its valuation from $22 billion, which was established just last month when it secured $1 billion from investors such as Sequoia Capital, Andreessen Horowitz, Coatue, and Morgan Stanley.
This valuation surge marks an impressive rise for Kalshi, which was valued at approximately $5 billion in October 2025 and had reached $11 billion by December.
Possibilities for a public offering are on the table. On Wednesday, CEO Tarek Mansour told CNBC that the company is "basically thinking about" pursuing an IPO, but not in the current year. He elaborated, stating, "Given our financial profile and the growth rate we’re experiencing, discussions about this are necessary." According to The Information, a listing isn’t anticipated before late 2027 or 2028.
Kalshi has seen remarkable growth, reporting an annualized trading volume of $178 billion by April 2026, which represents a 32-fold increase year-over-year. However, the platform is currently embroiled in a legal confrontation between state and federal authorities over the regulatory oversight of prediction markets.
Recently, the derivatives powerhouse CME filed a lawsuit against the CFTC regarding its approval of Kalshi's "perpetual" futures contracts, which allow traders to speculate on cryptocurrency prices and compete directly with CME's own offerings. Kalshi asserts that its event contracts fall under the CFTC's exclusive jurisdiction, a stance supported by the Trump-appointed agency.
However, state authorities view these sports markets differently, categorizing them as unlicensed gambling. Arizona brought criminal charges in March, while a judge in Massachusetts ruled to prohibit Kalshi's sports markets in January, and Nevada has extended its ban on prediction markets. This month, Kentucky sued Kalshi and competitor Polymarket, alleging they operate illegal sportsbooks.
In response, the CFTC filed a lawsuit against Kentucky on Tuesday, marking its ninth state lawsuit and the first against a state led by a Republican attorney general. Trump has previously stated that federal oversight of these markets is "critically important," with his son, Donald Trump Jr., serving as an advisor to both Kalshi and Polymarket.
The resolution of this issue remains uncertain. A federal judge in Michigan recently declared that sports prediction markets do not qualify as swaps, and former CFTC and SEC head Gary Gensler has submitted a brief supporting this viewpoint. As multiple states engage in ongoing litigation and conflicting rulings accumulate, the question of regulatory authority over prediction markets is likely headed to the Supreme Court.
For potential investors in Kalshi, the implications of this legal landscape are significant. Kentucky claims that 89% of the platform’s 2025 trading volume originated from sports, which are the very contracts that states are attempting to ban. Furthermore, the FT indicates that around two-thirds of wagers placed on Kalshi result in losses.