USDKalshi Seeks $40B Valuation After Recent $1B Raise
Prediction market operator faces rapid growth, IPO discussions and state legal fights
TL;DR
- Kalshi is reportedly discussing a new funding round at a $40 billion valuation after raising $1 billion last month.
- The company has reported rapid growth, including $178 billion in annualized trading volume by April 2026.
- State regulators, the CFTC, CME and courts remain central to unresolved legal fights over sports prediction markets.
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Kalshi is reportedly in talks to raise new capital at a valuation of about $40 billion, weeks after the prediction market operator disclosed a $1 billion Series F round at a $22 billion valuation. The discussions could close as soon as the third quarter of 2026, according to the Financial Times, while Kalshi declined to comment on the fundraising talks.
The potential raise would mark another sharp increase in Kalshi’s private-market valuation as prediction markets draw larger investors, more trading activity and deeper regulatory scrutiny.
Coatue led Kalshi’s Series F round, with Sequoia Capital, Andreessen Horowitz and Morgan Stanley also participating. The new discussions would nearly double the valuation attached to that round if completed at the level described by the Financial Times. Kalshi’s reported valuation path has moved from about $5 billion in October 2025 to a possible $40 billion less than a year later.
The reported fundraising would also place Kalshi ahead of Polymarket’s last cited fundraising target. Polymarket was said to have been in talks to raise $400 million at a $15 billion valuation. Kalshi and Polymarket are both central players in prediction markets, but Kalshi has positioned itself as a federally regulated venue under the Commodity Futures Trading Commission.
Revenue, volume and IPO discussions
Kalshi has surpassed $2 billion in annualized revenue, according to The Information. The company also said it reached $178 billion in annualized trading volume by April 2026, a 32x year-on-year increase. Those growth figures are part of the backdrop for the company’s latest fundraising discussions and early conversations with investment banks about a possible initial public offering.
Tarek Mansour, Kalshi’s CEO, told CNBC on Wednesday that Kalshi is “basically thinking about” an IPO. Mansour said the company would not go public this year, but described the discussion as consistent with Kalshi’s growth profile. “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 Information said a Kalshi listing is unlikely before late 2027 or 2028. The timing means the IPO discussions remain preliminary rather than an immediate listing plan. The company is also in early discussions with investment banks, according to the provided details, as it weighs how its financial profile could fit public-market expectations.
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State fights center on sports prediction markets
Kalshi’s growth is unfolding while its highest-profile markets face unresolved legal challenges. Kalshi argues that its event contracts are swaps under the CFTC’s exclusive jurisdiction, which would limit state-level efforts to treat the activity as gambling. The CFTC currently shares Kalshi’s reading that the contracts fall under federal jurisdiction.
State regulators have taken a different position, especially around sports markets, which they describe as unlicensed gambling rather than federally regulated derivatives. Arizona filed criminal charges in March 2026, and a Massachusetts judge barred Kalshi’s sports markets in January 2026. Nevada extended a ban on prediction markets, while Kentucky sued Kalshi and Polymarket this month, accusing both platforms of operating illegal sportsbooks.
The CFTC sued Kentucky on Tuesday to block its enforcement action, making Kentucky the ninth state the CFTC has taken to court. Kentucky is also the first state led by a Republican attorney general that the CFTC has sued in the fight. Trump has called federal authority over prediction markets “critically important,” and Donald Trump Jr. is an advisor to both Kalshi and Polymarket.
The legal record is not uniform. A Michigan federal judge recently ruled that sports prediction markets are not swaps. Gary Gensler, former CFTC and SEC chair, filed a brief arguing that sports prediction markets are not swaps. With multiple states in active litigation and conflicting rulings building, the fight over who regulates prediction markets appears likely to move toward the Supreme Court.
Kentucky alleges that 89% of Kalshi’s 2025 volume came from sports, making the category central to the regulatory dispute. The Financial Times also reported that roughly two-thirds of bets on Kalshi lose money. Those figures place sports contracts and customer outcomes at the center of the broader fight over whether prediction markets should be governed primarily as derivatives or gambling products.
CME and Illinois add pressure
Kalshi is also facing legal pressure from CME, which sued the CFTC last week over approval of Kalshi’s “perpetual” futures. The contracts allow traders to bet on crypto prices, placing Kalshi in direct competition with CME’s derivatives products. That case adds a separate fight involving a major derivatives incumbent rather than state gambling regulators.
Kalshi also sued the state of Illinois on Wednesday over a bill requiring prediction-market platforms to obtain a state license. The Illinois bill includes a 0.2% charge on the value of digital asset transactions or services provided to Illinois customers. The lawsuit fits Kalshi’s broader effort to preserve federal CFTC jurisdiction and avoid a state-by-state regulatory structure for prediction markets.
The main unresolved issue is whether courts will accept Kalshi’s federal-jurisdiction argument for sports prediction markets or allow state regulators to enforce gambling laws against those contracts. That question sits alongside the company’s fundraising, volume growth and IPO discussions, making Kalshi’s next phase dependent on both capital markets and court decisions.
FAQ
What valuation is Kalshi reportedly seeking?
Kalshi is reportedly discussing a new funding round at about a $40 billion valuation.
When could the new funding round close?
The Financial Times said the talks could close as soon as the third quarter of 2026.
Did Kalshi comment on the talks?
Kalshi declined to comment on the reported fundraising discussions.
What is the main legal dispute?
The dispute centers on whether sports prediction markets are federally regulated swaps or state-regulated gambling products.
This article has been refined and enhanced by ChatGPT.
