Report Values Kalshi at $40 Billion in Potential $1 Billion Funding Round
Key Facts
Reuters reported on September 29 that Kalshi was in advanced talks to raise about $1 billion at a valuation of nearly $40 billion, according to MarketScreener's account of the agency's report. That would put the valuation under discussion at nearly double the May round's valuation, but it remains a projected figure in negotiations whose final terms have not been announced. No independent details were available on participating investors or whether the round had closed. CNBC reported on October 29 on new funding at the same valuation, but details on its page could not be verified. The latest report's round size and valuation therefore rely on CNBC's account, while details of the earlier talks come from Reuters.
On May 7, Kalshi announced it had raised $1 billion in a Series F round led by Coatue, at a valuation of $22 billion. The company said Sequoia Capital, Andreessen Horowitz, IVP, Paradigm, Morgan Stanley and ARK Invest participated in the round. The valuation cited in later talks would thus rise to about $40 billion, compared with the May reference point of $22 billion. Philippe Laffont of Coatue said when the earlier round was announced: "Consumers have already embraced it, and we believe institutions will follow." The company linked the growth of its institutional customer base to increased activity on its platform.
Kalshi provided trading figures to explain the expansion in activity, saying institutional trading volume rose 800% in the six months before its May announcement. It also said annualized trading volume increased from $52 billion six months earlier to $178 billion at the end of the period. These figures were reported by the company in its funding announcement and are not independent measurements disclosed in the filing. In the same announcement, it said prediction-market activity on its platform exceeded 90% of U.S. activity. The indicators put institutional trading growth and broader activity at the center of the company's account of its business expansion.
Expansion has extended to products beyond the event contracts that formed the platform's foundation. In May, Kalshi announced the launch of perpetual cryptocurrency futures for U.S. investors, saying the product was fully regulated by the U.S. Commodity Futures Trading Commission. The company described the contracts as its biggest product expansion since introducing event contracts, and said they strengthened the platform's shift toward a financial derivatives exchange. On September 8, it announced that commodity-market trading volume had reached $400 million over seven months, saying the activity was growing faster than its cryptocurrency markets. The announcements point to the company's push to add new trading categories to its business.
The expansion has also included making Kalshi contracts available through established brokerage channels. On August 31, Alpaca announced a partnership with the platform to offer event contracts through its brokerage infrastructure, and said it supports more than 300 financial institutions. Kalshi said its trading volume exceeded $40 billion in July, according to company data. The partnership provides a route to distribute event contracts through a broker infrastructure serving financial institutions, while Kalshi has expanded its products to include commodities and perpetual contracts. The company had cited plans to develop new products in its May funding announcement, but the available reports did not clarify how the latest funding would be used or its final terms.