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Kalshi has raised $1 billion in a Series G round that values the prediction market operator at $40 billion. The company is working to build a broader financial exchange beyond the sports contracts that built its customer base.
The announcement came days after a partnership with S&P Dow Jones Indices and a day after Utah filed criminal charges against the company and its founders over its sports markets.
Series G lifts Kalshi to $40 billion valuation
Wellington and Sequoia co-led the round, Kalshi said Oct. 29, putting the post-money valuation at $40 billion. Other participants were Baillie Gifford, Stripes, Andreessen Horowitz, Coatue, Layer Global, Morgan Stanley Investment Management, Sequoia Global Equities, CapitalG, Hudson River Trading and Balyasny Asset Management.
Founded in 2018 by Tarek Mansour and Luana Lopes Lara, Kalshi began with event contracts tied to sports, elections and economic indicators. The company says sports brought millions of users and the liquidity to support new products. It now plans to extend that base into politics, crypto, economics, commodities and perpetual futures.
Kalshi volume tops $1 trillion annualized
Kalshi says its annualized trading volume now exceeds $1 trillion. That figure projects activity over a year rather than a total completed in a calendar year. The company also reported:
- More than $1 billion in annualized revenue from non-sports products
- More than 30 million accounts opened and over 75% of prediction market trading volume
- Commodities generating more than $100 million in annualized trading fees within three months
- Crypto trading volume of $140 billion annualized and politics volume of more than $8 billion annualized
- Perpetual futures volume of $83 billion and more than 500,000 traders since launching a few months ago
- International retail trading fees approaching $100 million annualized, one year after launching in more than 140 countries
Unlike conventional futures, perpetual futures have no expiration date. They can also involve leverage, which magnifies both gains and losses.
S&P deal brings Kalshi market credibility
Kalshi and S&P Dow Jones Indices (S&P DJI) announced a collaboration Oct. 26 with two parts. Kalshi becomes a preferred prediction market platform licensed to offer event contracts tied to S&P DJI indices. S&P DJI becomes a preferred provider for building indices from Kalshi event contract data.
Forthcoming Kalshi contracts will settle against official index values published by S&P DJI, including the S&P 500. A contract could pay out based on whether a benchmark reaches a set level, which differs from buying shares in an index fund or holding conventional futures.
“S&P DJI is the gold standard for benchmarks,” Mansour said in the release. He said bringing that standard to Kalshi would help accelerate retail and institutional demand. The release also states that Kalshi’s contracts based on the S&P 500 and other S&P indices are not sponsored, sold or endorsed by S&P DJI.
Prediction market data becomes new indices
S&P DJI will apply its index methodologies to Kalshi data to build indices on economics, politics and sports. Because individual event markets capture expectations about single outcomes, grouping related contracts could produce a gauge of expectations across an entire subject.
The companies have not announced launch dates for the indices or the contracts.
Institutions drive a quarter of volume
Kalshi is also courting professional traders. About 500 institutional entities were active on the exchange in September. Excluding market makers, they accounted for roughly 25% of trading volume, the company said.
Its partners include:
- Interactive Brokers
- Marex
- Clear Street
- Cantor Fitzgerald
- S&P
- Nasdaq
- Stripe
- Public.com
- Plus500
- Wealthsimple
- Alpaca
- PayPal
- Block
Kalshi plans to put the new capital toward institutional sales, distribution and product development aimed at hedge funds, proprietary trading firms and financial institutions. It also plans to launch single-stock perpetual futures and compute markets, in addition to the indices. International expansion will focus on Latin America and Europe.
Utah criminal charges cloud expansion
Kalshi’s growth has not settled the dispute over whether its sports contracts amount to gambling. On Wednesday, Oct. 28, Utah Attorney General Derek Brown filed 13 felony charges and one misdemeanor against Kalshi, Mansour and Lopes Lara. The charges include one count of pattern of unlawful criminal activity, a second-degree felony, and 12 counts of online gambling promotion. The misdemeanor is for general gambling promotion.
Prosecutors say an attorney general’s office investigator created a Kalshi account with a Utah-based IP address in September and placed wagers on sporting events. That was after an Aug. 4 federal court ruling against Kalshi, and an appeals court had denied the company’s request for an injunction while it appeals. The charges came two days after the Commodity Futures Trading Commission sued Utah, arguing the state has no jurisdiction over a federally regulated contract market.
Kalshi called the case “a crazy overreach” in a statement and said it expects to prevail in court. Utah is the second state to pursue criminal charges against the company. A federal judge initially blocked Arizona’s case, but the state is seeking to revive it after an appeals court ruling favorable to Nevada. A coalition of 37 state attorneys general has also filed a brief backing Utah’s authority.
Product launches, institutional adoption and the outcome of these legal fights will determine whether Kalshi can grow into a diversified exchange.
