Kalshi raises $1 billion at $40 billion valuation, plans stock perpetuals

What happened

Kalshi has raised $1 billion at a $40 billion valuation, the company's second billion-dollar round in roughly five months. Bitcoin.com News reported that Kalshi disclosed the financing to Reuters on Thursday, Oct. 29. Sequoia Capital and Wellington Management co-led the round, while Tiger Global Management and Dragoneer Investment Group also invested, according to Reuters. CNBC also reported the raise, Unchained noted.

The new valuation is nearly 82% higher than the $22 billion Kalshi announced in May, when Coatue led a $1 billion Series F, Bitcoin.com News reported. The company's valuation has risen quickly: it was valued at about $5 billion in October 2025 after a Series D co-led by Andreessen Horowitz and Sequoia, and at $11 billion in December 2025 after a $1 billion Series E led by Paradigm, according to Unchained.

Kalshi plans to direct some of the capital toward new products, including single-stock perpetual futures, leveraged versions of its event contracts and a market for trading compute prices, CNBC reported. Part of the money will also go to its institutional business, according to the company's announcement cited by Unchained. Kalshi described event contracts as a starting point, the report said. In September, Kalshi said it had 500 institutional clients, which accounted for a quarter of its volume when market makers were excluded.

Why it matters

The funding gives Kalshi more room to move beyond prediction markets and into derivatives markets currently served by established exchanges. Perpetual futures were Kalshi's first product outside event contracts; it announced them in late May and, after CFTC approval, began with crypto before adding equity indexes and metals. Bitcoin and ether held at BitGo will also back perps margin loans for some Kalshi Prime clients, according to Unchained. A multi-asset Kalshi would compete more directly with CME Group and Intercontinental Exchange, which owns the New York Stock Exchange.

The raise also lands amid a legal dispute over Kalshi's sports-related contracts. It came a day after Utah's attorney general filed criminal charges against Kalshi, naming CEO Tarek Mansour and co-founder Luana Lopes Lara as co-defendants and alleging the company illegally promoted online gambling, Unchained reported. Kalshi has argued that federal law, rather than state gambling rules, governs its contracts, and the CFTC has asked a federal judge to halt Utah's civil case. Sports contracts have reportedly generated about 65% of Kalshi's revenue at certain points, Bitcoin.com News reported, making the dispute material to its business.

What the data shows

Kalshi's private-market valuation has climbed from about $5 billion in October 2025 to $11 billion in December 2025, $22 billion in May 2026 and $40 billion in the latest round. The latest mark is nearly 82% above the May valuation. Sequoia and Wellington were reportedly in advanced talks in August over a round of at least $750 million at the same $40 billion valuation, Unchained reported.

Kalshi reportedly captured about 72% of trading volume across major prediction-market venues in the third quarter of 2026, Bitcoin.com News reported, helped by sports activity and distribution through brokerage platforms. It competes with crypto-native rival Polymarket, whose rivalry with Kalshi has intensified. Kalshi has also discussed an eventual IPO, though Mansour ruled out a 2026 debut and later commentary pointed to 2027 or 2028, depending on market and regulatory conditions.

Background

Kalshi was founded by MIT classmates Mansour and Lopes Lara and runs a federally regulated exchange where users buy contracts tied to future events. A contract priced at 65 cents generally implies a 65% market-implied probability, Bitcoin.com News explained. The company drew wider attention during the 2024 U.S. presidential election, when prediction markets saw billions in trading activity and became a popular way to follow Donald Trump's chances, the report said.

Kalshi's expansion has coincided with rapid growth in prediction-market trading. At the time of its May financing, Kalshi said annualized volume had more than tripled over six months, from about $52 billion to $178 billion, according to Bitcoin.com News. Institutional activity had risen 800% by then, and by September the company reported 500 institutional entities. The broader prediction-market industry's annual trading volume expanded from roughly $500 million in 2022 to over $63 billion in 2025, Bitcoin.com News reported.

What to watch

The next test is whether Kalshi can turn its new capital into products that compete with incumbent derivatives exchanges while its legal fight over sports contracts proceeds. The company has said federal law governs its contracts, but some appellate rulings have favored state authority, and Mansour has suggested the dispute could reach the Supreme Court, according to Bitcoin.com News. The reports did not specify a timetable for the new products or a final decision on an IPO.

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