Kalshi Raise $1 Billion at a $40 Billion Valuation

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This is our roundup newsletter. A weekly curated list of the biggest things happening in prediction markets.

This edition was written and researched by Omar El Safy and Pet Berisha.

Last week we published Why Did S&P Dow Jones Indices Sign With Kalshi?, on the licence that lets Kalshi settle S&P 500 and Dow contracts on S&P's own numbers.

Kalshi have raised $1 billion at a $40 billion valuation, up 82% from the $22 billion they were valued at in May 2026.

Sequoia Capital and Wellington Management co-led the round, and Reuters reported that Tiger Global Management and Dragoneer Investment Group took part too.

In October 2025, Kalshi were valued at about $5 billion. That became $11 billion in December 2025, $22 billion in May 2026, and now $40 billion.

Kalshi plan to spend the money building a broader exchange, including leveraged event contracts and perpetual futures on individual stocks. On going public, CEO Tarek Mansour told CNBC "A company of our financial profile with the rate of growth that we're seeing, that sort of conversation has to happen," though a listing wouldn't come until 2027.

The CFTC sued Utah on Tuesday, asking a federal court to stop the state using its gambling law to shut down CFTC-registered exchanges like Kalshi.

It follows Utah attorney general Derek Brown suing Kalshi and Susquehanna the week before, saying "anyone offering gambling to Utahns is on notice that it is illegal" and accusing Kalshi of running "an online casino." Kalshi lost their own federal case against Utah in August 2026, and the appeal is still with the Tenth Circuit.

CFTC chair Michael Selig said "Congress entrusted the CFTC to be the federal regulator with sole responsibility to oversee these markets." Utah is the 10th state the CFTC has taken to court over who gets to regulate these contracts.

On Polymarket, Democrats are at 73.5% to win the Senate in tomorrow's midterms and Republicans are at 27.5%, as of Monday afternoon. The House is barely a contest, with Democrats at 94.5%.

Republicans hold the Senate 53-47 today. Democrats need a net gain of four seats, since the tie-breaking vote belongs to a Republican vice president.

The closest race we could find on Kalshi is Iowa, where Josh Turek, the Democrat, last traded at 45¢ and Ashley Hinson, the Republican, at 52¢.

Bloomberg reported traders going door to door in Maine this week looking for an edge on the state's Senate race, and the New York Times called the midterms a "multimillion dollar market."

Millennium, the roughly $97 billion hedge fund, are building internal tools that let their portfolio managers use Polymarket and Kalshi prices as trading signals for other assets, Bloomberg reported.

Market makers Susquehanna and Jump Trading are already active on the exchanges, and quant firm AQR expanded their own prediction markets research team earlier this year.

One of Millennium's portfolio managers is also an early backer of 5c(c) Capital, a venture fund raising up to $35 million for prediction market startups, alongside Kalshi's Tarek Mansour and Polymarket's Shayne Coplan.

Coinbase's ($COIN ( ▼ 5.1% )) prediction markets business passed $200 million in annualised revenue in Q3 2026, double the roughly $100 million it was at the quarter before. CEO Brian Armstrong called it "one of the fastest-growing products in Coinbase history."

Net income rose 66% to $719 million, though $715 million of that came from gains on the crypto Coinbase hold. Bernstein estimated prediction markets and derivatives now account for about 25% of Coinbase's transaction revenue.

At Robinhood ($HOOD ( ▼ 1.2% )), prediction markets revenue rose more than sixfold to $173 million in Q3 2026, ahead of the $120 million they made from crypto trading, which fell 55% year on year.

Predicted is written by Pet Berisha and Omar El Safy. Every edition, our quarterly State of Prediction Markets reports and more at predicted.co.

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