Prediction market platform Kalshi Inc. has raised over $1 billion in a new financing round led by Coatue Management, achieving a valuation of $22 billion—roughly double its $11 billion valuation from December 2025.
The company’s annualized revenue currently stands at $1.5 billion, reflecting explosive growth in the prediction market sector, which saw total trading volume climb to approximately $63.5 billion in 2025 and exceed $23 billion in February 2026 alone. The fundraising comes despite ongoing regulatory pressure, including criminal charges filed this week by Arizona’s attorney general alleging illegal gambling operations.
Kalshi now joins rival Polymarket in the race to dominate the rapidly expanding event trading industry, with both platforms seeking valuations around $20 billion as institutional investors race to gain exposure to what analysts project could become a $100 billion addressable market within a decade.
Funding Round and Valuation
Record-Breaking Raise
Kalshi’s latest financing round represents one of the largest capital raises in the prediction market sector to date. The $1 billion infusion was led by Coatue Management, a prominent technology-focused investment firm. The deal roughly doubles the company’s valuation from its December 2025 funding round, when it raised $1 billion from investors including Paradigm, Sequoia Capital, Andreessen Horowitz, and ARK Invest at an $11 billion valuation.
Revenue Growth
Kalshi’s annualized revenue—a measure of current revenue projected over a full year—has reached approximately $1.5 billion. This represents dramatic growth from late 2025, when the company first surpassed $1 billion in annualized revenue.
Sports-related contracts now account for roughly 90% of Kalshi’s platform fees, with monthly active users surging from about 600,000 at the start of 2025 to more than 5.1 million by early 2026. The company’s cumulative total trading volume has exceeded $486 billion as of March 2026.
Competitive Landscape
Rivalry with Polymarket
Kalshi and decentralized competitor Polymarket together dominate the prediction market sector, commanding approximately 79% of global market share. As of early March 2026, Polymarket’s cumulative volume stood at approximately $560.7 billion, maintaining a slight edge over Kalshi’s $447.1 billion.
Both platforms have been pursuing aggressive growth strategies. Polymarket was reportedly exploring a funding round at a $12-15 billion valuation in late 2025, later revised to approximately $20 billion, after Intercontinental Exchange (ICE), parent of the New York Stock Exchange, agreed to invest up to $2 billion at an implied valuation of about $8 billion.
Market Growth Trajectory
The prediction market industry has experienced explosive growth, with total notional volume reaching approximately $63.5 billion in 2025, up from $15.8 billion in 2024. January 2026 alone saw $26.7 billion in volume across seven marketplaces, while February added $23.4 billion.
Analysts at Piper Sandler project the total addressable market for prediction markets could reach $100 billion within the next decade, with a projected annual growth rate of 47%.
Business Model and Market Position
Revenue Drivers
Kalshi generates revenue primarily through platform fees on trades. Sports wagering has become the dominant activity, accounting for an estimated 90% of transaction volume. The company’s annualized revenue of $1.5 billion positions it to challenge traditional sportsbooks, with analysis suggesting Kalshi now captures nearly one-quarter of DraftKings’ sportsbook revenue.
Strategic Partnerships
Kalshi has secured several high-profile partnerships to expand its reach:
Robinhood: The trading platform became Kalshi’s largest traffic source, contributing over 50% of trading volume in late 2025
Tradeweb Markets: Strategic partnership announced in February 2026 to provide prediction market data to bond trading platform customers, with Tradeweb taking an equity stake
Media partnerships: Exclusive agreements with CNBC and CNN to integrate prediction market data into programming
Institutional Adoption
Despite regulatory concerns, Wall Street firms are actively participating in the prediction market ecosystem. Susquehanna International Group and Jump Trading both operate as market makers on Kalshi’s platform. Robinhood’s event contracts have become its fastest-growing product line by revenue in early 2026.
Regulatory Challenges
State-Level Enforcement
The fundraising success comes amid escalating regulatory scrutiny. On March 17, 2026, Arizona Attorney General Kris Mayes filed criminal charges against Kalshi, alleging the platform operates an “illegal gambling operation” in violation of state laws prohibiting unlicensed sports wagering and election betting. The charges represent the first criminal prosecution against a prediction market platform in the United States.
Kalshi faces similar challenges from gaming regulators in multiple states, including New York, where the company sued the state Gaming Commission in October 2025 over cease-and-desist orders.
Federal vs. State Jurisdiction
Kalshi maintains that its status as a federally regulated exchange overseen by the Commodity Futures Trading Commission (CFTC) preempts state gambling laws. CFTC Chairman Michael Selig has publicly supported prediction market platforms, asserting the agency has “exclusive jurisdiction” over them and that state-level enforcement is “entirely inappropriate.”
Institutional Caution
The regulatory uncertainty has prompted some financial firms to proceed cautiously. Point72 Asset Management and Balyasny Asset Management recently banned employees from trading on prediction platforms in their personal accounts.
Industry Outlook
Market Projections
The prediction market sector is positioned for continued growth, driven by several factors:
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Regulatory clarity: Federal court rulings in 2024-2025 established that event contracts are regulated financial swaps rather than gambling products, opening doors for institutional capital
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Product expansion: Platforms are expanding beyond elections and sports into markets for Federal Reserve rate decisions, economic data, and corporate events
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Mainstream integration: Google has integrated prediction market data into search and finance platforms, while Robinhood’s event trading business continues to expand
2026 Catalysts
Industry observers expect continued growth throughout 2026, driven by the US midterm elections, World Cup events, and ongoing geopolitical tensions including the Iran conflict. The entry of major competitors including Coinbase, Crypto.com, CME Group (in partnership with FanDuel), and Robinhood’s proprietary prediction market is expected to further expand the market.
Frequently Asked Questions
What is Kalshi’s new valuation after this funding round?
Kalshi raised over $1 billion at a $22 billion valuation in a round led by Coatue Management, roughly doubling its $11 billion valuation from December 2025.
How much revenue is Kalshi generating?
The company’s annualized revenue currently stands at approximately $1.5 billion. Sports-related contracts account for about 90% of platform fees.
What regulatory challenges does Kalshi face?
Arizona’s attorney general filed criminal charges against Kalshi on March 17, 2026, alleging illegal gambling operations. The company faces similar challenges from gaming regulators in multiple states but argues that its CFTC oversight provides federal preemption.
How does Kalshi compare to Polymarket?
Kalshi and Polymarket together command approximately 79% of the global prediction market. Polymarket’s cumulative volume is approximately $560.7 billion compared to Kalshi’s $447.1 billion as of March 2026. Both platforms are seeking valuations around $20 billion.
Who are Kalshi’s major investors and partners?
The latest round was led by Coatue Management. Previous investors include Paradigm, Sequoia Capital, Andreessen Horowitz, and ARK Invest. Strategic partners include Robinhood (its largest traffic source), Tradeweb Markets, CNBC, and CNN.
