Prediction exchange Kalshi is in advanced negotiations to secure approximately $1 billion in new funding at a valuation near $40 billion, according to a report from Reuters. The proposed round would represent an $18 billion increase in value, or roughly an 82% surge, since the company's previous valuation benchmark in May.
Surging Revenue and Valuation Metrics
Sequoia Capital and Wellington Management are currently in discussions to lead the financing, with Tiger Global and Dragoneer Investment Group also named as reported participants. Private markets research firm Sacra estimates that Kalshi reached $3.5 billion in annualized revenue in June, expanding rapidly from $735 million recorded earlier in 2025. In May, Kalshi disclosed its own annualized revenue figure as exceeding $1.5 billion.
At a $40 billion valuation, Kalshi would trade at approximately 11 times its estimated June revenue. By comparison, traditional sportsbook operator DraftKings trades at roughly 2.1 times revenue. Because sports event contracts account for approximately 80% of Kalshi's total volume, matching DraftKings' valuation multiple at $40 billion would require Kalshi to generate nearly $19 billion in annual revenue.
Market Competition and Regulatory Scrutiny
According to Reuters, Kalshi aims to expand into a multi-asset trading platform, positioning itself against traditional institutional venues like CME Group and New York Stock Exchange parent Intercontinental Exchange (ICE). While Kalshi has captured market share over the past year according to Dune Analytics data, competition remains intense. Its direct prediction market rival, Polymarket, is separately pursuing $1 billion in new capital, while Robinhood now routes select high-volume contracts to its proprietary exchange.
Regulatory pressure on event trading platforms continues to heighten. US Senator Adam Schiff and other lawmakers have publicly raised concerns regarding investor protection. Additionally, the House Oversight Committee has conducted an insider trading probe into event exchanges since May, targeting Kalshi early in its investigation alongside broader inquiries into expanded insider trading probes into prediction platforms. Kalshi has also rejected wash trading allegations and held preliminary discussions regarding a potential future initial public offering (IPO). Reuters reports the funding round is expected to close within weeks.
Key Takeaways
- Kalshi is negotiating a $1 billion capital injection at a $40 billion valuation.
- Lead investor talks involve Sequoia Capital and Wellington Management alongside Tiger Global and Dragoneer Investment Group.
- Research firm Sacra estimates Kalshi reached $3.5 billion in annualized revenue in June.
- Sports contracts comprise 80% of Kalshi's platform volume as the firm targets expansion into multi-asset trading.
Why It Matters
Kalshi's steep valuation escalation highlights institutional appetite for event-driven derivatives and prediction infrastructure. If completed at $40 billion, the deal signals that venture investors view event contracts not merely as online sportsbooks, but as financial market venues capable of challenging traditional derivatives exchanges. However, maintaining an 11x revenue multiple will require Kalshi to successfully navigate ongoing congressional probes and clear regulatory pathways toward a public listing.
