Kalshi hits $40 billion valuation in $1 billion funding round

Kalshi closed a $1 billion financing round on Thursday that values the prediction market exchange at $40 billion. The valuation marks a sharp increase from the $22 billion figure assigned during its May funding round. Sequoia Capital and Wellington Management co-led the latest investment.

The company attributes the rise in value to sustained trading activity over the past five months. Growth was fueled by high-profile events including the 2026 FIFA World Cup and the NFL season. These events drove the expansion of combo contracts, which function similarly to sportsbook parlays. Trading volume also increased on election markets ahead of the U.S. midterms.

Legal disputes regarding sports contracts have emerged during this period of expansion. Federal appeals courts in the Eighth and Ninth Circuits ruled in August and September that states possess the authority to regulate sports-related event contracts. Kalshi and other prediction platforms argue that federal jurisdiction is appropriate. A third appeals court has ruled in favor of the federal position. A Supreme Court decision may resolve the conflict.

Beyond prediction markets, Kalshi announced its first non-prediction offering in late May. The platform introduced perpetual futures, becoming the first U.S. exchange to offer this crypto-derived trade. The new funds will support the development of leveraged event contracts. The company also plans to launch perpetual futures tied to individual stocks and create markets for trading compute prices.

Kalshi stated it will use the capital to deepen its institutional business. In September, the company reported working with 500 institutional entities. Excluding market makers, these accounts generated 25% of the platform's total trading volume. The company has seen rapid valuation growth in the private markets, rising from $5 billion in October 2025 to its current $40 billion status.

CEO Tarek Mansour discussed the company's future listing plans in a June appearance on CNBC's "Squawk Box." He indicated that a move to public markets is under consideration for 2027. "A company of our financial profile with the rate of growth that we're seeing, that sort of conversation has to happen," Mansour said.

The company announced the new round in a blog post on Thursday. It described prediction markets as the initial step in building a broader financial exchange. Kalshi said the new investment will accelerate product development and institutional outreach.