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Kalshi in the prediction market has raised funds again, this time raising $1 billion directly, bringing Kalshi’s valuation to $11 billion.Kalshi had just completed $300 million in financing in October, and was valued at $5 billion at the time.
In June this year, Kalshi had just completed a $185 million Series C round of financing, with a valuation of only $2 billion.Equivalent to half a year, its valuation has risen directly from 2 billion to 11 billion now, an increase of 5.5 times..
Paradigm founder Matt Huang said Paradigm has invested in Kalshi in three consecutive rounds this year and it is one of the fastest growing companies they have ever seen.he saidPrediction markets are a civilization-scale truth-revealing machine, but they are also a breadth-first search for interesting and useful collections of financial exposures that society needs (much like YouTube is a breadth-first search for media).
Such a rapid increase in valuation has not only made its co-founder Luana Lopes Lara one of the youngest female billionaires in history, but also made its earliest investorsYC’s $150,000 investment 6 years ago turned into nearly $700 million(Should be lower due to financing dilution, but may continue to increase in the future).
Freda Duan, partner at Altimeter Capital, previously wrote an article arguing that,Prediction Market is blurring the boundary of “information/asset”.
So how did Kalshi get started, what difficulties did it encounter along the way, what opportunities enabled it to grow so rapidly and explosively this year, and what are its future market opportunities. This article does some more research to see how Kalshi is using prediction markets to reshape the financial world.
The founder who emerged from war and ballet
Kalshi co-founder Tarek Mansour was born in Lebanon and experienced the conflict in Lebanon in 2007.That experience made him understand,The world is full of uncertainty, and those who can manage this uncertainty can control their destiny.He taught himself English, prepared for the SAT, and eventually attended MIT as a triple major in electrical engineering, computer science, and mathematics.
The growth experience of co-founder Luana Lopes Lara was not simple either.At a ballet school in Brazil, she underwent very cruel training – the teacher would light cigarettes under her thighs and test how long she could lift her legs to her ears without getting burned.To gain a competitive advantage, classmates would hide shards of glass in each other’s ballet shoes.But the experience forged her extraordinary willpower and immunity to rejection—traits that would be crucial in future battles with regulators.
After high school, Lopes Lara worked as a professional ballet dancer at a theater in Austria for nine months.But her dream was to be the next Steve Jobs, inspired by her mother, a math teacher, and her father, an electrical engineer, a two-time Olympiad medalist, and in 2015, she received an acceptance letter from MIT.
Thinking of ideas while on Wall Street
In the summer of 2016, Mansour worked as an equity derivatives intern at Goldman Sachs.During the Brexit referendum, he watched institutional investors scramble to hedge against Brexit risks.Investment banks created complex structured products, but these products were expensive and imprecise.Institutions were buying expensive, complex products that didn’t exactly fit their needs, Mansour thought at the time.Why doesn’t an exchange exist where the underlying assets are events in themselves?Because events are real to all of us.
Meanwhile, Lopes Lara interned at Ray Dalio’s Bridgewater Associates and Ken Griffin’s Citadel, where Mansour also worked as a global macro trader.
Both were computer science majors at MIT, and Lopes Lara always sat at the front of the classroom.To learn from her, Mansour began sitting next to her.
In 2018, both interned at Five Rings Capital in New York.During an evening walk back to the apartment, an idea took shape: Why couldn’t the outcome of the event itself be traded directly?Why do investors have to bet on the future indirectly through traditional instruments such as stocks and bonds?
We see that most trading occurs when people have a certain view of the future and then try to find a way to express that view in the market
So, I entered YC with my idea.
After graduating from MIT in 2019, the two applied to YC with this seemingly crazy idea.Surprisingly, they were admitted.But soon, the cruelty of reality became apparent: in the United States, the legality of prediction markets is in a gray area.
When they realized they needed federal approval to legally operate a prediction market, they contacted more than 40 law firms for help, but none were willing to take over—the founders were too young, the company was too small, and the risks were too high.Lopes Lara said in an interview with Forbes:
Fresh out of college, we took huge risks.Two whole years with no product launch – nothing – and if we didn’t get regulatory approval, the company would be at zero.
During the 2020 pandemic, she worked remotely from London while Mansour returned home to Lebanon.There he lived through a deadly port explosion that killed more than 200 people.Mansour spent the day helping to clean up the neighborhood and search for survivors, while continuing to work for Kalshi at night.
The break came when Jeff Bandman, a lawyer who had worked for the Commodity Futures Trading Commission (CFTC), became the only person willing to help them.Under Bandman’s guidance, Kalshi began an 18-month regulatory approval process with the CFTC.
On November 4, 2020, a historic moment arrived: Kalshi received approval from the CFTC to become the first federally regulated exchange in the United States to exclusively trade event contracts, and was granted “Designated Contract Market” (DCM) status.This allowed Kalshi to effectively create and legitimize an entirely new financial asset class.
In July 2021, Kalshi was officially launched.Early market events are relatively boring, such as “Will indoor dining in New York be closed?” “Will CPI increase by more than 0.4% in August?” “Will a recession begin this year?” and other contracts.But trading volumes have remained tepid, with monthly trading volumes hovering between just $20 million and $30 million.
The real opportunity for growth lies in the electoral market.But in June 2023, when Kalshi applied to list a contract related to the control of the U.S. Congress, the CFTC rejected the application on the grounds that it “constituted gambling.”This is a fatal blow to it – because the election market is the most attractive and liquid category among prediction markets.
At this point, all other investors in the company decided that suing federal regulators was “a terrible idea.”But Lopes Lara came up with a bold idea: sue the CFTC.
Historic win for Kalshi in September 2024
At the end of 2023, Kalshi formally sued the CFTC.In September 2024, a U.S. District Court judge ruled in favor of Kalshi, arguing that the CFTC exceeded its authority.On October 2, a federal appeals court upheld that ruling, allowing Kalshi to bring the election contract back online.
The win makes Kalshi the first regulated marketplace for election contracts in the United States in more than a century.Lopes Lara said that they really want to do things the right way because their vision is to build the largest financial exchange in the world and doing it legally is something they cannot compromise on.
The tipping point for the exponential outbreak is here: the 2024 election
The 2024 U.S. presidential election became a watershed moment for Kalshi.In the run-up to the election, users bet more than $500 million on candidates.Even more impressive, Kalshi Markets accurately predicted Trump’s victory a month before Election Day.On Election Day, single-day trading volume reached $245 million.
Its data has experienced explosive growth:
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2023 revenue: US$1.8 million
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2024 revenue: $24 million (1,220% growth)
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Transaction volume in 2023: US$183 million
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Transaction volume in 2024: US$1.97 billion
Explosive growth in revenue and trading volume has given KalshiFunding frenzy: Valuation increased 5.5x in six months:
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June 2025: Kalshi announced the completion of a $185 million Series C round of financing, valuing it at $2 billion.This funding round demonstrates the huge potential of the election market.
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October 2025: Just four months later, the company announced a $300 million Series D round, co-led by Sequoia and a16z, taking its valuation to $5 billion.At the same time, Kalshi announced the opening of services to more than 140 countries around the world, creating a single global liquidity pool.
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December 2, 2025: Kalshi announced the completion of a $1 billion Series E round of financing, valuing it at $11 billion.This means that the valuation doubled again in less than two months.The investment was led by crypto venture capital Paradigm, with participation from Sequoia Capital, a16z, Meritech Capital, IVP, ARK Invest, CapitalG and YC.
Paradigm co-founder Matt Huang said: “Kalshi’s exponential growth shows the huge potential demand for prediction markets as a new asset class – from institutions to ordinary people. People come because of one type of market, but stay because of the breadth. We think this is an unlimited cultural and economic phenomenon, similar to how we felt about cryptocurrencies a decade ago.”
