Prediction market platform Kalshi is in talks to raise fresh funds at a valuation of about $40 billion, the Financial Times reported, in a round that could close as soon as the third quarter. The valuation would nearly double the $22 billion Kalshi reached last month when it raised $1 billion from backers including Sequoia Capital, Andreessen Horowitz, Coatue, and Morgan Stanley. The fundraising discussions come as Kalshi faces an escalating legal battle between state and federal authorities over whether prediction market sports contracts are CFTC-regulated derivatives or illegal gambling.
Kalshi Valuation Climbs From $5B to Potential $40B
The jump to a potential $40 billion valuation caps a rapid climb for Kalshi, which was worth around $5 billion in October 2025 and $11 billion by December. The company has grown explosively, claiming to have achieved an annualized trading volume of $178 billion by April 2026, up 32x year-on-year.
CEO Mansour Confirms IPO Consideration for 2027 or 2028
CEO Tarek Mansour told CNBC on Wednesday that Kalshi is "basically thinking about" an IPO, though not this year. "A company of our financial profile with the rate of growth that we're seeing, that sort of conversation has to happen," he said. The Information has reported that a listing is unlikely before late 2027 or 2028.
CME Sues CFTC Over Kalshi Perpetual Futures Approval
Last week, derivatives giant CME sued the CFTC over its approval of Kalshi's "perpetual" futures, contracts that let traders bet on crypto prices and compete head-on with CME's own products. Kalshi maintains that its event contracts are swaps under the CFTC's exclusive jurisdiction, a reading the Trump-appointed agency shares.
States File Criminal Charges and Civil Suits Against Kalshi
States see prediction markets differently, casting the sports markets as unlicensed gambling. Arizona filed criminal charges in March, a Massachusetts judge barred Kalshi's sports markets in January, and Nevada has extended a ban on prediction markets. This month, Kentucky sued Kalshi and rival platform Polymarket, accusing them of running illegal sportsbooks. A Michigan federal judge recently ruled that sports prediction markets are not swaps, and former CFTC and SEC chair Gary Gensler has filed a brief arguing the same.
CFTC Sues Kentucky to Block State Enforcement
The CFTC fired back on Tuesday, suing Kentucky to block its enforcement, the ninth state it has taken to court and the first led by a Republican attorney general. Trump has called federal authority over the markets "critically important," and his son Donald Trump Jr. is an advisor to both Kalshi and Polymarket. With multiple states in active litigation and conflicting rulings stacking up, the question of who regulates prediction markets looks bound for the Supreme Court.
For Kalshi's would-be investors, a great deal rides on the answer. Kentucky alleges that 89% of the platform's 2025 volume came from sports, the very contracts states are trying to ban. According to the FT, roughly two-thirds of bets on Kalshi lose money.
FAQ
What valuation is Kalshi seeking in its latest fundraising round?
Kalshi is in talks to raise fresh funds at a valuation of about $40 billion, the Financial Times reported, in a round that could close as soon as the third quarter. This would nearly double the $22 billion valuation the company reached last month when it raised $1 billion from backers including Sequoia Capital, Andreessen Horowitz, Coatue, and Morgan Stanley.
When does Kalshi plan to go public?
CEO Tarek Mansour told CNBC on Wednesday that Kalshi is "basically thinking about" an IPO, though not this year. The Information has reported that a listing is unlikely before late 2027 or 2028.
What legal challenges is Kalshi facing over its sports prediction markets?
Arizona filed criminal charges in March, a Massachusetts judge barred Kalshi's sports markets in January, and Kentucky sued Kalshi this month accusing it of running an illegal sportsbook. The CFTC sued Kentucky on Tuesday to block its enforcement, the ninth state it has taken to court. Kentucky alleges that 89% of the platform's 2025 volume came from sports contracts that states are trying to ban.
