Kalshi in talks to raise funds at $40B valuation, nearly doubling in two months

Kalshi is pursuing a new funding round at a $40 billion valuation, according to Financial Times reporting, less than two months after closing a $1 billion Series round at a $22 billion valuation in May 2026. The potential transaction would represent an 82% step-up from the previous round and more than quadruple the company's $5 billion valuation from earlier in 2025. Sources indicate the financing could close as early as Q3 2026, with the funding round likely to include continued participation from major institutional investors that backed the May round, including Coatue, Sequoia Capital, Andreessen Horowitz, and Morgan Stanley.

The rapid valuation expansion reflects sustained momentum in the prediction markets sector. Kalshi recorded trading volumes exceeding $17 billion in May 2026, compared with less than $5 billion during the same month in 2025—a more than threefold increase year-over-year. At the time of its previous funding announcement, the company disclosed annualized trading volumes of $178 billion, surpassing the $53 billion recorded six months earlier. Sports-related prediction contracts currently account for approximately 65% of total trading volume, while multi-outcome combination contracts, introduced in the prior year, have emerged as a significant growth catalyst for the platform.

Beyond its core prediction market offering, Kalshi is strategically expanding into traditional derivatives markets. The company recently launched perpetual cryptocurrency futures following CFTC approval, a decision that has drawn legal challenge from CME Group. CME Group's lawsuit argues that the contracts should be classified and regulated as swaps rather than futures, illustrating how Kalshi's growth is beginning to create competitive friction with established derivatives infrastructure providers and traditional gambling enterprises. The expansion into perpetual contracts represents a material diversification of Kalshi's revenue and volume streams beyond conventional prediction market segments.

Kalshi's trajectory from $11 billion valuation in December 2025 to $22 billion in May 2026 and now $40 billion in current funding discussions demonstrates the accelerating investor appetite for prediction market platforms. The 82% increase in valuation over a single month underscores market conviction that the prediction market category has achieved sufficient regulatory clarity and consumer adoption to justify premium institutional valuations. The company's move toward traditional derivatives also signals a strategic intent to position prediction markets as a complementary asset class within the broader derivatives ecosystem.