Kalshi doubles valuation in weeks amid prediction market duopoly bet with Polymarket

Prediction market Kalshi’s private valuation has more than doubled in a matter of weeks, with over $1.3 billion of fresh capital committed this quarter alone. Last week, the startup raised $1 billion at an $11 billion valuation, in a round led by Sequoia and CapitalG, just on the heels of a $300 million Series D round at a $5 billion valuation in October. 

It appears Kalshi is locked in a funding race with rival Polymarket, which is reportedly exploring fresh financing at a $12-$15 billion valuation.

Prediction markets have quickly become one of the hottest private market themes in crypto and fintech, echoing earlier cycles where capital briefly clustered around NFTs, gaming, L2s, or AI. The difference this time is that most of the fundraising is concentrated in just two platforms, Kalshi and Polymarket, rather than spread across dozens of platforms. Investors are effectively making a duopoly bet that these two will become the default venues for trading event risk and sentiment data, instead of a broad, fragmented sector.

The rapid rerating in private valuations is likely driven by a mix of factors. The first is clearer regulatory pathways, with Kalshi being a CFTC-regulated exchange and Polymarket moving toward U.S. re-entry via a licensed derivatives venue. Both platforms have also seen strong top-line growth in volumes and open interest (OI). For Polymarket specifically, the looming POLY token and airdrop add a speculative layer of demand that private investors are clearly willing to underwrite.

At the time of writing, Kalshi’s volume market share stands at ~60% while Polymarket is at ~40%, though Kalshi's metrics are released by the company itself while Polymarket’s are publicly verifiable onchain. OI also continues to grind higher on Kalshi and Polymarket at $320 million and $300 million, respectively, fast approaching the peaks seen during last year’s U.S. election cycle. November is on pace to be the highest-ever volume month for both platforms.

Of note, this week, the CFTC issued an amended order officially allowing Polymarket to reenter the U.S. after barring the alleged unregistered derivatives exchange in 2022.

This is an excerpt from The Block's Data & Insights newsletter. Dig into the numbers making up the industry's most thought-provoking trends.