Kalshi Nears Funding at $40 Billion Valuation, Targets IPO Next Year

US prediction-market platform Kalshi is nearing the close of a new funding round that would value the company at about $40 billion, and it may pursue an initial public offering as soon as next year.

Bloomberg reported on September 30 that Kalshi is in late-stage talks to raise fresh capital at a valuation of about $40 billion. The deal would likely mark the company’s last private funding round before an IPO.

Kalshi’s valuation has risen rapidly. It was valued at $11 billion in a fundraising round in December last year and then at $22 billion in March. If the latest deal is completed, the company’s valuation will have climbed nearly fourfold in about 10 months. Sequoia Capital and Wellington Management are discussing leading the round.

Investors are focused on Kalshi’s high profitability and surging trading volumes. Documents reviewed by Bloomberg show the company’s gross margin is about 90%. Its annual recurring revenue was said to be about $4 billion as of August.

Founded in 2018, Kalshi runs a prediction-market platform that allows users to bet on a range of events, from elections and movie awards to sports results. Over the past year, sports-related trading has driven most of the company’s growth, with volumes rising sharply around major events including American football and the World Cup.

User data compiled by Dune Analytics show Kalshi’s trading volume exceeded $40 billion in August. That was about four times the level six months earlier. Rival Polymarket is also raising funds in a round led by 1798 Capital and is targeting a valuation of about $21 billion.

Kalshi and Polymarket operate as financial exchanges overseen by the US Commodity Futures Trading Commission. Unlike traditional sportsbooks, which are subject to state-by-state gambling rules, they can offer services across the US under a federal regulatory framework.