Wall Street Is Now Betting on Prediction Markets — and Kalshi Just Raised $1 Billion to Prove It

TLDR

• Kalshi confirmed a $1 billion Series F raise led by Coatue, valuing it at $22 billion
• Investors include Sequoia, a16z, Morgan Stanley, Paradigm, IVP, and ARK Invest
• Institutional trading volume jumped 800% in six months; annualized volume hit $178 billion
• Kalshi now holds 90% of U.S. prediction market activity with 2 million monthly users
• Several U.S. states have issued cease-and-desist orders, with ongoing legal battles over regulation

Kalshi has confirmed it raised $1 billion in a Series F funding round, putting its valuation at $22 billion. The round was led by Coatue and included Sequoia Capital, Andreessen Horowitz, Paradigm, IVP, Morgan Stanley, and ARK Invest.

The announcement confirms a Bloomberg report from March that first revealed the investment and its size.

Kalshi runs a regulated marketplace where users trade contracts tied to real-world outcomes. These include elections, economic data releases, sports results, and weather events.

The platform says it now generates $1.5 billion in annualized revenue and serves 2 million monthly users. It claims to capture 90% of all U.S. prediction market activity.

Trading volume has grown fast. Annualized volume reached $178 billion, up from $52 billion six months ago — more than tripling in that period.

Institutional use has driven much of that growth. Kalshi says institutional trading volume rose 800% over the past six months as hedge funds and trading firms use event contracts to hedge risk or express views on macro events.

Where the Money Is Going

Kalshi plans to use the new capital to expand its institutional services. That includes block trading tools, broker integrations, and new risk products aimed at asset managers and insurance firms.

Kalshi’s main competitor, Polymarket, is reportedly seeking $400 million in funding at a $15 billion valuation. The two platforms combined hit $150 billion in lifetime trading volume in March.

Research firm Bernstein projects total prediction market volumes will reach $240 billion this year, a 370% increase from 2025. It forecasts the market will hit $1 trillion by 2030.

Legal Challenges Mount

Despite the growth, Kalshi faces pushback from state regulators. Nevada, New Jersey, Illinois, and other states have issued cease-and-desist orders or filed legal challenges. They argue some of Kalshi’s event contracts function as unlicensed sports betting.

Kalshi says its exchange is federally regulated by the Commodity Futures Trading Commission and is not subject to state gambling laws. The CFTC has sued those states in an effort to keep regulation at the federal level.

Prediction markets have also faced scrutiny over insider trading. In late April, a U.S. Army soldier was charged with using confidential information to win more than $400,000 on Polymarket through bets tied to the January removal of Venezuelan President Nicolás Maduro. Master Sergeant Gannon Ken Van Dyke has pleaded not guilty.

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