Kalshi has raised USD 1 billion in a new funding round led by Coatue Management, valuing the US-based prediction market platform at USD 22 billion.
The fundraise marks the company's third round in seven months, with each successive round roughly doubling its valuation. The latest capital injection follows growing investor appetite for prediction markets, even as the sector contends with regulatory scrutiny and reputational concerns. Proceeds are earmarked for expanding services for corporate users, including additional data integrations for trading firms and broader block trading capabilities.
Institutional ambitions drive the latest round
While Kalshi's growth to date has been driven primarily by individual users (the platform claims approximately two million monthly active users), the company is now positioning institutional investors as the next significant growth driver. Trading volume from institutional participants on the platform reportedly grew 800% over the past six months, and the company executed its first custom block trade last week, a large transaction negotiated off a public market between institutions.
Kalshi's annualised trading volume has reached USD 178 billion, more than tripling over the same six-month period, while annualised revenue has surpassed USD 1.5 billion. Coatue, whose origins lie in hedge fund management, approached Kalshi in late February 2025 about an investment, with the firm's familiarity with trading markets cited as a key factor in the partnership.
Other investors participating in the round include Sequoia Capital, Andreessen Horowitz, IVP, Paradigm, Morgan Stanley, and ARK Invest.
Regulatory and competitive pressures remain
Despite its rapid expansion, Kalshi continues to face legal challenges from state regulators over the legality of its sports betting products. A federal judge permanently blocked Arizona from prosecuting the company for alleged violations of state gambling laws, a notable win for the platform on the regulatory front. Critics of such state-level actions have argued they are partly motivated by the risk of gaming tax revenue losses as users shift from casinos and traditional online sports books.
The sector has also faced scrutiny over insider trading concerns. Federal prosecutors have charged a US Army Special Forces soldier with allegedly using classified information to profit from a wager on an American military operation. The individual has pleaded not guilty.
Competition is intensifying. Rival platform Polymarket, whose core market is restricted to overseas users, raised a round from Intercontinental Exchange, the parent of the New York Stock Exchange, in October 2024, and is opening access to a new US-regulated platform. Interactive Brokers and DraftKings have also entered the space.
A Coatue official indicated that institutional trading has the potential to constitute the substantial majority of Kalshi's business within several years, given institutional participants' preference for regulated, rule-compliant venues.
