• Kalshi raised $1 billion in a funding round led by Coatue, with participation from Morgan Stanley (MS), Sequoia Capital (SE), and Andreessen Horowitz, at a $22 billion valuation.
  • The company now claims over 90% of U.S. prediction market volume, with annualized trading reaching $178 billion in the past six months.
  • Institutional adoption is accelerating, with hedge funds and asset managers using Kalshi’s markets for hedging and information aggregation.

A New Kind of Financial Infrastructure

Kalshi, the regulated prediction market platform, announced it has raised $1 billion in a funding round led by Coatue, lifting its valuation to $22 billion. The round saw participation from heavyweights including Morgan Stanley, Sequoia Capital, and Andreessen Horowitz, signaling deep investor conviction in the future of market-based information aggregation.

Founded to turn real-world questions—from election outcomes to economic data releases—into tradable contracts, Kalshi is building what it calls a “new financial system” where probabilities are priced transparently. The company is regulated by the CFTC under a sandbox framework, which has allowed it to operate legally in the U.S. while other prediction market platforms have faced regulatory hurdles.

Explosive Growth and Institutional Adoption

The fresh capital comes on the heels of blistering growth. Kalshi says it now commands over 90% of the U.S. prediction market volume, with annualized trading reaching $178 billion over the past six months. That’s up from tens of billions in late 2025, according to people familiar with the matter. The surge has been driven by increasing participation from institutional investors—hedge funds and asset managers are using the platform to hedge event risk and gain real-time insights into everything from Federal Reserve decisions to geopolitical conflicts.

“We’re seeing demand from players who want to price uncertainty in a transparent, liquid, and regulated way,” a Kalshi spokesperson said. The company declined to comment on whether it is profitable.

Why Predictions Markets Are Booming

Kalshi’s rapid rise reflects a broader trend toward probabilistic pricing of event-driven outcomes. Supporters argue that prediction markets aggregate information more efficiently than polls or expert surveys. Critics, however, warn of gambling-like features, market manipulation risks, and the potential for mispricing during high-volatility events.

Regulatory scrutiny remains a key risk. While Kalshi operates under CFTC oversight, the agency has signaled it is watching the sector closely. Any shift in the regulatory landscape could reshape the platform’s growth trajectory. For now, the company is doubling down on product expansion, with plans to launch contracts tied to macro-economic indicators and even corporate earnings.

What’s Next

With $1 billion in fresh capital, Kalshi is well-positioned to scale its market-making operations and attract even more institutional users. The company is also exploring international expansion, though regulatory frameworks abroad remain unclear. For investors, the bet is that prediction markets will become a standard tool in financial risk management. The coming quarters—and the next election cycle—will test that thesis.

Correction: An earlier version of this article misstated the funding round as being at a $20 billion valuation. The correct valuation is $22 billion.