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Institutional trading demand drives latest prediction market funding round
TL;DR
- Kalshi closed a $1 billion Series F round at a $22 billion valuation.
- Institutional trading volume rose 800% over the past six months.
- The company said annualized trading volume increased from $52 billion to $178 billion.
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Kalshi closed a $1 billion Series F funding round at a $22 billion valuation, marking a major expansion for the federally regulated prediction market as institutional trading demand accelerated sharply.
The round was led by Coatue and included participation from Sequoia Capital, Andreessen Horowitz, IVP, Paradigm, Morgan Stanley, and ARK Invest. Kalshi announced the financing on May 7, 2026, and said the new valuation doubled its worth from roughly five months earlier.
Kalshi said institutional trading volume on its platform rose 800% over the past six months. The company also said annualized trading volume more than tripled from $52 billion to $178 billion, while a company spokesperson told Bloomberg that Kalshi’s annualized revenue run rate has surpassed $1.5 billion.
Kalshi Targets Institutional Event Trading
Kalshi said institutions are using event contracts to hedge real-world risk and access continuous, market-based probability signals tied to future outcomes. The company said the capital will support adoption across hedge funds, asset managers, proprietary trading firms, and insurance companies, while helping unlock access to trillions of dollars in institutional capital.
Kalshi said it represents more than 90% of U.S. prediction market activity and the majority of global volume. Kalshi and Polymarket together accounted for most of the more than $25 billion in prediction market trading volume recorded last month, according to Bitget Wallet data cited in the reporting.
The company operates a centralized and federally regulated marketplace where users trade contracts tied to real-world outcomes, including elections, economic data releases, sports, weather, politics, and other event categories. Kalshi said it will keep expanding its product suite through recently launched block trading capabilities, upcoming risk products, and deeper broker integrations.
Philippe Laffont, Founder of Coatue, said, “Kalshi is building the leading platform for trading in real-world events,” adding that “Consumers have already embraced it, and we believe institutions will follow.” Tarek Mansour, co-founder and CEO of Kalshi, said, “There are few categories in recent history that have scaled this quickly outside of AI,” and added that “Event contracts could become a trillion-dollar market, and we’re still in the early stages of that transition.”
Crypto Expansion and Regulatory Pressure
Kalshi has expanded its crypto ambitions by appointing John Wang as head of crypto. Wang told Forbes, “We would like to have Kalshi’s prediction markets in every large crypto app.” Andreessen Horowitz’s crypto unit, a16z crypto, recently raised $2.2 billion for its latest fund and identified prediction markets as a major investment theme.
Bernstein said prediction markets are entering an “institutional era,” driven by demand for bespoke block trades and custom event contracts that let firms hedge specific macro and geopolitical risks.
Kalshi also faces legal and political scrutiny in the United States. NPR reported that the company is involved in at least 19 federal lawsuits over whether its event contracts violate state gambling laws. Massachusetts, New Jersey, Arizona, Nevada, Illinois, and Connecticut have challenged Kalshi’s operations, arguing that some sports and event-based contracts amount to unlicensed gambling.
Political pressure has intensified in Washington, where Democratic lawmakers have called for tighter oversight of prediction markets following concerns over “suspicious trades” tied to geopolitical events. Kalshi has responded by adding former Obama staffer Stephanie Cutter as a policy adviser to strengthen its Washington relationships.
FAQ
How much did Kalshi raise?
Kalshi raised $1 billion in a Series F funding round.
What is Kalshi’s latest valuation?
Kalshi’s latest valuation is $22 billion.
Who led the funding round?
Coatue led the round.
What regulatory issue does Kalshi face?
Kalshi faces lawsuits over whether some event contracts violate state gambling laws.
This article has been refined and enhanced by ChatGPT.
