Prediction market platforms Kalshi and PolyMarket are reportedly exploring new fundraising rounds that could value each company at around $20 billion, almost double their recent valuations.
The Wall Street Journal reported on Friday, citing people familiar with the matter, that both platforms have held preliminary discussions with potential investors about raising new capital at elevated valuations. The report said talks are at an early stage and may not result in a deal or secure a target valuation.
Kalshi currently operates in the United States and offers markets allowing users to bet on outcomes involving sports, politics, economy and cultural events. The company was last valued at about $11 billion in December, when it raised $1 billion from investors including Paradigm and Sequoia Capital.
Founded in 2018 by Tarek Mansour and Luana Lopes Lara, Kalshi received approval from the US Commodity Futures Trading Commission in 2020 to operate as a regulated exchange for event-based markets. The platform has since expanded rapidly and recently surpassed the $1 billion revenue mark, with some estimates placing the figure closer to $1.5 billion.
Connected: Kalshi, Polymarket cease trading in Nevada after court decision
Polymarket plans US launch later this year
PolyMarket, launched in 2020 by Shayne Coplan, remains inaccessible to US users without a virtual private network, but plans to offer a regulated domestic version of its platform later this year. The company was valued at about $9 billion in October after New York Stock Exchange owner Intercontinental Exchange agreed to invest up to $2 billion.
Both platforms have attracted the attention of lawmakers and regulators. As Cointelegraph reported, US Democratic lawmakers are drafting legislation to regulate prediction markets after suspiciously placed bets on the timing of US and Israeli attacks on Iran raised insider trading concerns.
Senator Chris Murphy alleged that individuals close to the White House may have used prior knowledge of the attack to place bets, noting that several Polymarket accounts had reportedly made nearly $1 million by placing bets just hours before the explosions in Tehran were reported.
Connected: Kalshi Founder Provides Update on Iran’s Khamenei Market Outline
Polymarket faces suspicions of insider trading
Polymarket has faced a number of insider trading allegations after several traders placed unusually well-timed bets on major events. A small group of crypto wallets recently bet more than $1.2 million on the market linked to an on-chain investigation of DeFi platform Axiom shortly before blockchain investigator ZachXBT published claims about insider trading linked to the project.
In a separate incident last month, another Polymarket account reportedly made nearly $400,000 after placing a large bet on the capture of Venezuelan President Nicolas Maduro shortly before the news became public, raising questions about whether some traders had advance information.
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