Kalshi, the regulated prediction market platform, has just closed a $185 million funding round led by crypto-focused venture capital firm Paradigm, boosting its valuation to $2 billion post-money. Representatives from both Paradigm and Kalshi confirmed the news to TechCrunch.
“Prediction markets remind me of crypto 15 years ago: a new asset class on a path to trillions,” said Matt Huang, co-founder and managing partner at Paradigm, in a statement. “There’s no better team than Kalshi to scale prediction markets and reshape how people think about everything from elections and economic markets to weather and sports.”
The Wall Street Journal was first to report the round.
Polymarket Eyes $200M Amid Regulatory Uncertainty
This announcement comes on the heels of a Bloomberg report revealing that Polymarket, Kalshi’s largest rival, is in talks to raise $200 million at a $1 billion pre-money valuation. The round is said to be led by Founders Fund, although the deal has not yet been finalized. Founders Fund declined to comment.
The fundraising comparison is telling. While Kalshi is commanding a premium valuation, investors may be pricing in regulatory risk for Polymarket.
A Tale of Two Strategies: Regulation vs Rebellion
Prediction markets enable users to bet on the outcome of real-world events—from elections to sports—using blockchain technology. But regulatory compliance has been a key differentiator.
Polymarket, which has faced regulatory pressure from the Commodity Futures Trading Commission (CFTC), was banned in the U.S. in 2022 following an enforcement action. As a result, it operates outside of U.S. jurisdiction and is restricted in several countries, including:
- United Kingdom
- France
- Ontario (Canada)
- Singapore
- Poland
- Thailand
- Belgium
- Taiwan
Authorities in these regions argue that prediction platforms either resemble gambling and require betting licenses, or that they function like securities markets and must comply with financial regulations.
Kalshi, by contrast, took the regulated route. After its own regulatory tussle, the company came to an agreement with the CFTC and is now fully compliant in the U.S. That gives it a considerable edge with institutional investors who prioritize lower legal risk.
Polymarket’s Political Play & X Partnership
Despite its legal hurdles, Polymarket may be betting on changing tides. If Donald Trump returns to office with a more crypto-friendly administration, Polymarket could push to lift the U.S. ban.
In fact, momentum may already be building. Earlier this month, Elon Musk’s X platform announced a partnership with Polymarket, naming it the site’s “official” prediction market. While details are still vague, the endorsement is significant.
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