Author: Gu Yu, ChainCatcher
The capital narrative of prediction markets was rewritten again today by Kalshi.
On October 29, prediction market platform Kalshi announced the completion of a $1 billion Series G funding round, with a post-money valuation of $40 billion. The round was co-led by Sequoia Capital and Wellington Management, with participation from Baillie Gifford, Morgan Stanley Investment Management, Coatue Management, and Andreessen Horowitz. According to Reuters, Tiger Global and Dragoneer also participated.
This is Kalshi's second $1 billion raise in five months. In its Series F round in May this year, its valuation was $22 billion; a year earlier, at the Series D round in October 2025, that number was $5 billion.
8x in a year, 20x in 15 months.And on the same day, Predict.fun used a pre-sale window of only two hours to tag its token with a fully diluted valuation of $1.64 billion—less than one twenty-fourth of Kalshi's.
1. Sequoia's fourth bet
For Sequoia Capital, this is not a new bet, but a renewed one.
In February 2021, Sequoia led Kalshi's $30 million Series A at a valuation of $145 million. Since then, it has continuously increased its investment in the Series C round in June 2025 ($2 billion), the Series D round in October 2025 ($5 billion, co-led with a16z), and the Series F round in May 2026 ($22 billion). This round is the first time it has appeared as a co-lead in Kalshi's late-stage rounds.
The pace of valuation increase is steeper than the fundraising rhythm: $2 billion in June 2025, $11 billion in December, $22 billion in May 2026, and $40 billion in October. The secondary market is also pricing in advance—according to Forge Global, Kalshi's Forge Price on October 1 had reached $970.53, corresponding to a valuation of $36.4 billion; a year ago, that price was $44.96.
What supports this valuation is actual revenue. The Information reported that World Cup trading pushed Kalshi's annualized revenue above $4 billion, double that of two months ago; research firm InGame estimated based on its public fee formula that it had collected approximately $2.04 billion in fees as of October 6, 2026, compared to about $263.5 million for the full year of 2025. In terms of trading volume, the annualized figure reached $178 billion in May, and the World Cup in July brought $27 billion in monthly trading volume and 3 million new users.
Many views regard this round as the last private round before an IPO. CEO Tarek Mansour only acknowledged that there have been "discussions" and gave no timetable; he said on CNBC in June this year that an IPO would not happen earlier than 2027.
2. From prediction market to "comprehensive exchange"
But what is more worth recording than the amount is Kalshi's redefinition of itself in the funding announcement.
"Prediction markets are just the starting point." Kalshi wrote in its blog, with the goal of building a comprehensive financial exchange. This sentence has already been realized in its products: in 2026, after CFTC approval, it entered the perpetual contract market, first launching crypto perpetuals, then expanding to stock indices and metals, and subsequently launching its first non-prediction-market product—gold and silver perpetual contracts—becoming the first exchange to list such products in the United States. The new funds will be used for leveraged trading, single-stock perpetual futures, and contract markets around AI computing power as a tradable commodity.
This is a route directly pointing to CME Group and Intercontinental Exchange (ICE, the parent company of the New York Stock Exchange).A company that started with "who will win the Super Bowl" is now applying to become what a futures exchange should look like. The supporting clearing layer is also being implemented simultaneously: its own clearinghouse Kalshi Klear has been approved, replacing the previous MIAXdx, supporting faster listing and settlement, and providing 3.75% annualized interest on positions.
The institutional side is also advancing. Kalshi disclosed in September that it had established partnerships with 500 institutional entities; excluding market makers, institutional trading volume accounts for 25% of total volume. The shareholder list has also changed from crypto VCs to Wellington Management, Morgan Stanley Investment Management, and Baillie Gifford—names that rarely appeared in the shareholder list of an "event contract" company before. Globalization is unfolding simultaneously: after the Series D round in October 2025, it opened up to more than 140 countries, reached data partnerships with CNN and CNBC, and publicly stated that it would find a "local Robinhood" as a partner in every major market.
This road is not all good news. Two federal appellate courts have ruled that states have the authority to regulate sports-related event contracts, while a third appellate court has issued a contrary ruling; this week, the Utah Attorney General filed criminal charges against Kalshi and two executives, alleging illegal promotion of online gambling, while New York filed a lawsuit in August seeking $36 billion in damages and demanding the platform be shut down.
A company valued at $40 billion still operates its core product in the jurisdictional gap between U.S. states and the federal government.
III. Two Views of Time in the Sector
The Kalshi-Polymarket duopoly is now firmly established. In the second quarter of 2026, global prediction market notional trading volume reached $111 billion, up 1,764% year over year and exceeding the full-year totals of 2024 and 2025 combined, with Kalshi accounting for about 63% and Polymarket about 28%, together more than 90%; by August, Kalshi's global share had risen to about 60%, compared with 35% in 2025.
Polymarket is struggling on the other side. It is in the middle of a funding round led by 1789 Capital at a post-money valuation of $21 billion—more than double the $9 billion valuation at the time of ICE's investment in 2025, but only half of Kalshi's. After acquiring CFTC-licensed exchange QCEX, its existing software could not handle its trading volume, and the U.S. platform almost needs to be rebuilt; the CFTC has opened a new investigation, and the NFA once threatened to terminate its membership over record-keeping issues. Management is also in turmoil: CEO Shayne Coplan was reported to have used company funds to pay for private jets and apartment rent, and investors used this to demand rectification and the appointment of a CFO; he only hired his first CFO in September of this year.
Distributors are turning into competitors. Robinhood was once Kalshi's most important channel, routing more than half of Kalshi's trading volume in the second quarter of 2025; but in November it formed a joint venture with Susquehanna, acquired MIAXdx and renamed it Rothera, building its own CFTC-licensed exchange and clearinghouse, with prediction market customers already exceeding 1 million, first-quarter annualized revenue of $415 million, and match-result and championship contracts during the World Cup having migrated to Rothera. Coinbase offers contracts through its partnership with Kalshi, and within two months of launch its annualized revenue exceeded $100 million; Gemini and Crypto.com have also entered by layering on trading verticals. Hyperliquid launched an on-chain prediction market in May and has so far captured only 0.3% of trading volume—the barriers of liquidity networks are higher in prediction markets than in DeFi.
Traditional gambling and tech giants are also entering. DraftKings and FanDuel each plan to invest $200 million to $300 million in 2026 to build prediction market apps, and Meta has announced the construction of an independent prediction market app codenamed Arena. According to industry statistics, there are already more than 125 active prediction market platforms, compared with 15 in 2020.
And on the same day Kalshi announced its funding, Predict.fun opened a Pre-TGE Prime Sale in the Binance Wallet, with a window of only two hours from 08:00 to 10:00 UTC, and eligibility to participate required Binance Alpha points. Its native token PREDICT has a fixed total supply of 1 billion, with 16% unlocked at TGE, a pre-market quote of $14.52, and a fully diluted valuation of about $1.64 billion. It was founded by PancakeSwap co-founder dingaling, is based on BNB Chain, and focuses on a "yield-bearing prediction market"—users trade YES/NO shares with USDT, and the underlying collateral simultaneously generates yield; it previously received investment from YZi Labs.
The token design itself is not crude: a five-year unlock cycle, full lock-up of early supporters at TGE, and a lock-up option in the airdrop are all relatively restrained arrangements. The problem is timing—on one side is a CFTC license, a proprietary clearinghouse, 500 institutional clients, and a $40 billion valuation earned over five years; on the other side is a platform whose product has not yet taken shape, handing pricing power to the market in a two-hour window.
Kalshi has chosen a slow path heavy on assets, compliance, and top-level capital operations: first solidify licenses and institutional relationships, then deepen the moat with a globally unified liquidity pool and derivatives categories. Predict.fun represents another path—light, fast, and tokenized—rapidly gathering community and liquidity through tokenomics and exchange listings, but the cost is that value support depends heavily on secondary-market expectations and always operates outside the regulatory gray zone.
It can be said that the two differ in scale and path, and issuing tokens is also a routine move in crypto-native markets. But routine does not equal reasonable. When the most valuable company in the sector is turning itself into an exchange through licenses, global marketing, and top-level capital operations, while another group of players is still using token issuance to solve growth problems—these are not two parallel routes, but two answers to "what to do first," and the market has already given its preference through a 24-fold valuation gap.
Conclusion
Today's juxtaposition is highly symbolic: on one side is a licensed giant valued at $40 billion, backed four times by Sequoia, and aiming at the territory of traditional exchanges; on the other side is a decentralized upstart whose valuation is less than a fraction of that, yet which on the same day pushed its token onto Binance Alpha and MEXC.
The endgame of prediction markets will most likely not be decided by "who issues a token first," but by "who obtains legal status first and who builds institutional-grade liquidity first." Kalshi's $1 billion buys not just a valuation, but a ticket into the mainstream financial system; and the token frenzy of Predict.fun and others will ultimately have to answer the same question before regulation and real trading volume—what does your price actually discover: information, or speculation?
