Kalshi and Polymarket seek funding targeting a $20 billion valuation

Global prediction-market platforms Kalshi and Polymarket are reportedly pursuing fresh fundraising rounds, each aiming for a valuation of around $20 billion. However, with U.S. regulatory pressure on prediction markets intensifying, there are questions over whether they can actually reach those targets.

According to The Wall Street Journal (WSJ) on the 6th (local time), Kalshi and Polymarket have recently been in early-stage talks with prospective investors based on those valuations. Both companies are said to be pitching figures roughly double the valuations they received just a few months ago, in the second half of last year.

Founded in 2018, Kalshi was approved in 2020 by the U.S. Commodity Futures Trading Commission (CFTC) as the first regulated prediction exchange and is operating legally in the United States. It offers forecasting services across a range of areas including sports, politics, the economy and popular culture. In December, it raised $1 billion from investors including Paradigm and Sequoia Capital, securing a valuation of $11 billion. Some in the industry estimate Kalshi’s annualized revenue has recently surpassed $1 billion and reached around $1.5 billion.

Polymarket, which launched in 2020, currently restricts direct access for U.S. residents unless they circumvent the block using a virtual private network (VPN), but it plans to officially roll out a U.S.-compliant version of its app within this year. Polymarket previously received an investment from Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange (NYSE), in October last year, when it was valued at $9 billion.

However, the two platforms have recently faced ethical controversy after sensitive geopolitical issues—such as a potential U.S. strike on Iran or whether Iran’s Supreme Leader Ali Khamenei could be ousted—were listed as betting markets. In response, U.S. Representatives Blake Moore (Republican) and Salud Carbajal (Democrat) jointly introduced a bill last Friday to limit the creation of markets on certain topics, including war and sports, on prediction-market platforms, putting an institutional brake on the sector.

Potential fallout from aggressive user-acquisition marketing has also come under scrutiny. Transactions suspected of leveraging inside information were detected as the two platforms targeted college students. A notable example involved members of a male college fraternity that includes the stepson of Amazon founder Jeff Bezos, who placed bets during the Super Bowl period on Bezos’s whereabouts. Polymarket is also reported to have provided thousands of dollars in cash to fraternities in exchange for recruiting new sign-ups, further fueling market concerns.