Bloomberg Reports on Kalshi's Investment Proposals
U.S.-regulated prediction market Kalshi is reportedly fielding investment proposals from venture firms that would value the company at up to $12 billion, according to Bloomberg, citing individuals familiar with the discussions. These approaches come less than two weeks after Kalshi successfully raised over $300 million at a $5 billion valuation. Bloomberg indicated that some investors have been discussing funding at valuations of "$10 billion to $12 billion or higher."
This significant valuation jump reflects a rapid reassessment of event-trading platforms operating under U.S. regulatory oversight. Kalshi operates a federally regulated platform where participants can trade contracts tied to the outcomes of various real-world events, including politics and macroeconomic data. The emergence of fresh proposals suggests that investors are anticipating that regulated prediction markets have the potential to scale into mainstream financial and sports sectors, attracting engagement from both retail applications and institutional partners.
Factors Driving Investor Interest in Prediction Markets
Two primary forces are contributing to the current investor enthusiasm for prediction markets: regulatory clearance and distribution channels. Kalshi's U.S. regulated status is a key factor, as it facilitates partnerships with brokerages, sports leagues, and media outlets. Regarding distribution, event contracts are increasingly being integrated into sports and mainstream applications, creating new avenues for customer acquisition and revenue generation. This model is comparable to options-style micro-bets on data releases or game outcomes, with platforms generating revenue through fees, spread capture, and, in some instances, market-making activities.
The current valuation discussions also highlight a broader competitive landscape for funding, where scale and regulatory licenses are considered scarce assets. With a limited number of U.S.-permitted venues, investors are willing to pay a premium for entities that can rapidly onboard significant partners and maintain compliance with regulatory scrutiny. Near-term growth for these platforms will likely depend on their ability to convert media attention and league partnerships into a substantial base of active users and to develop deeper markets beyond the political sphere.
Rivals and Partners in the Prediction Market Ecosystem
Rival platform Polymarket has announced that Intercontinental Exchange (ICE) would invest up to $2 billion at a $9 billion post-money valuation. Furthermore, Polymarket's chief executive, Shayne Coplan, recently stated that the venue "has been given the green light to go live in" the U.S. after temporarily halting operations there in 2022. In a significant development, Polymarket also announced it will serve as the designated clearinghouse for DraftKings if the sportsbook launches a predictions market, following its acquisition of Railbird. The Wall Street Journal has reported that the National Hockey League has entered into multi-year licensing agreements with both Kalshi and Polymarket.
Meanwhile, Kalshi is actively developing its sports distribution strategy through partnerships with consumer platforms. In August, Robinhood announced plans to launch a prediction market for professional and college football, enabling users to wager on game outcomes through a partnership with Kalshi. John Wang, Kalshi's Head of Crypto, expressed optimism to The Block, stating that the company's market "should be available on every large crypto application and exchange within the next 12 months." If this expansion is realized, it would position event contracts alongside existing spot and derivatives trading, thereby broadening liquidity and expanding use cases.
The competitive landscape is intensifying. ICE's significant interest in Polymarket, DraftKings' integration with Polymarket, and the league licenses secured by both Kalshi and Polymarket indicate that multiple distribution pathways are simultaneously opening up. For investors, a key consideration is whether the underlying economics of these venues—including take rates, hedging costs, and capital efficiency—can sustain the elevated valuations across the entire sector.
The Future of U.S.-Regulated Markets
Funding discussions at higher valuations often precede significant product expansion. For Kalshi, the immediate development pipeline includes expanding into sports and macroeconomic event markets, as well as potential exchange integrations that will expose event contracts to crypto-native users. This strategy relies on U.S. compliance to secure institutional partnerships while simultaneously leveraging retail-focused channels for scale. Execution risks remain, with contract design, trading limits, and overall market quality being critical factors in determining whether open interest will deepen or become fragmented across different venues.
Competitors are moving with considerable speed. Polymarket's potential backing from ICE, its clearinghouse arrangement with DraftKings, and its secured league licenses all point to an aggressive pursuit of credibility and user engagement. If two or three key operators manage to establish durable distribution channels, the prediction market space could evolve similarly to options or daily fantasy sports (DFS) markets, characterized by a few dominant venues with substantial liquidity, complemented by more specialized niche markets. In such a scenario, valuations approaching $10–12 billion would necessitate sustained user growth, increased average contract values, and a clear roadmap for developing data partnerships and media rights.
Currently, investors appear to be prioritizing speed to market and rapid scaling. With new capital infusions, prominent league endorsements, and established broker integrations, the event trading sector is making significant strides towards a mainstream presence. Whether this trajectory justifies a doubling of Kalshi's private valuation within a matter of weeks will ultimately depend on the successful execution of distribution agreements, the maintenance of regulatory stability, and the ability of these platforms to consistently convert new users into active, recurring traders.