Prediction market platform Kalshi is negotiating a new $750 million funding round that would value it at $40 billion, according to people familiar with the matter, CoinDesk reports. If finalized, the deal would nearly double the company's valuation in just three months, cementing its status as the runaway leader in a sector Wall Street is racing to dominate.
Silicon Valley's Sequoia Capital and Boston-based Wellington Management, a firm overseeing $1.3 trillion, are considering leading the investment. Sequoia is deepening its existing stake, while this would mark Wellington's first bet on Kalshi. This level of institutional heavyweight interest signals a pivotal moment: prediction markets are no longer a fringe experiment but a legitimate asset class attracting pre-IPO capital at a breathtaking scale.
A $40 Billion Valuation That Defies Fintech's Cooling Trend
This potential raise is aggressive by any measure. In May, Kalshi raised $1 billion at a $22 billion valuation. A jump to $40 billion implies a valuation increase of over 80% in one quarter, a pace that defies the broader cooling in late-stage fintech funding.
The platform's explosive revenue growth provides the stated justification. Kalshi's annualized revenue hit $4 billion in July, turbocharged by betting on the 2026 World Cup. Sequoia Capital recently stated Kalshi "now claims 95% U.S. market share in prediction markets." Its nearest rival, Polymarket, posted revenue of $1.1 billion for the same period, after raising $600 million at a $15 billion valuation last August. Kalshi isn't just growing; it's widening the gap, with over 80% of its volume coming from sports contracts.
For Wellington, a firm known for positioning ahead of public listings, the move is a clear preamble. Kalshi CEO Tarek Mansour said in June the company is considering an IPO in 2027. This round could be the final major private check, providing the war chest to polish financials and scale operations before a debut. The parallel isn't just in fintech, but in the surge of mega-funding for foundational tech platforms, as we saw in the recent Databricks Raises $5 Billion as Investor FOMO Floods AI. Investor conviction is clustering around potential category kings.
This Capital Pile Alters the Entire Prediction Market Landscape
A successful $750 million fundraise does more than bolster Kalshi's balance sheet. It fundamentally reshapes the competitive and regulatory terrain.
First, it locks in a dominance that will be nearly impossible to challenge. This capital can fund massive marketing spends, aggressive talent acquisition, and expansion into new contract types beyond sports. It allows Kalshi to outspend rivals on technology and compliance, creating a moat that widens with every dollar.
Second, it forces regulators to engage with a regulated giant. Kalshi is a CFTC-licensed exchange, a status it secured with the help of lawyer Jeff Bandman, who just returned to lead its Kalshi Prime business. A private company valued at $40 billion in this space will attract intense and continuous scrutiny from Washington. Every political event contract or economic indicator market will be parsed for potential systemic influence, turning each product launch into a regulatory dialogue. The scale invites the spotlight.
Finally, it pressures traditional information and betting platforms. Kalshi's model, a real-time, money-based consensus on event outcomes, competes with everything from sportsbooks to opinion polling and even parts of the financial news ecosystem. A well-capitalized Kalshi could move beyond "will Team X win?" to "will the Fed cut rates?", creating a potent, liquid alternative data source. This evolution mirrors the disruptive potential seen in other blockchain-adjacent sectors, like the loan origination surge detailed in Figure's $226 Million Quarter Proves Blockchain Beat Lenders.
What Could Derail the Trajectory?
The sheer size of the bet introduces new risks. Regulatory backlash is the most direct threat; a major political controversy around its markets could spur restrictive legislation. Execution risk also scales with valuation. Kalshi must deploy this capital to generate proportional returns, moving beyond sports to maintain growth and justify its price before 2027. Any stumble in revenue growth or margin expansion would make a $40 billion IPO a tough sell to public markets.
The talks with Sequoia and Wellington are not yet confirmed. But their mere occurrence reveals that top-tier finance now views the aggregation of global opinion, traded as a liquid asset, as one of the most valuable businesses being built today.
Disclaimer: This XOOMAR analysis is for informational and educational purposes only. It is not financial, investment, legal, tax, or professional advice. It does not provide buy, sell, hold, price-target, portfolio, or personalized recommendations. Verify information independently and consult qualified professionals before making decisions.
The Bottom Line
- A $40 billion valuation at this stage signals Wall Street's acceptance of prediction markets as a legitimate, high-growth asset class.
- The involvement of Sequoia and Wellington Management ($1.3 trillion AUM) provides massive institutional credibility and pre-IPO capital, setting a new benchmark for the sector.
- Kalshi's 95% U.S. market share and 80% quarterly valuation jump defy broader fintech cooling, highlighting its dominant position and explosive revenue driven largely by sports contracts.
Originally published on XOOMAR. For more news and analysis, visit XOOMAR.
