Prediction market Polymarket seeks $1B at $20B+ valuation, more than double October's $9B round. Rival Kalshi leads in volume; both face regulatory challenges.
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Polymarket is in early talks to raise roughly $1 billion at a valuation above $20 billion, Bloomberg News reported Tuesday, citing people familiar with the matter. The prediction markets company completed a round at a $9 billion valuation last October and another at $15 billion in April. This new round would more than double the October figure.
Main competitor Kalshi was valued at $22 billion in May after an investment, and has outpaced Polymarket's growth this year, Bloomberg said. Polymarket has opened its U.S. platform and seen annualized revenue triple to more than $1.2 billion, the sources said. Prediction market betting surged during the World Cup this summer.
Still, Kalshi hosted three times more trading volume than Polymarket in July, according to user-compiled data from Dune Analytics cited by Bloomberg.
Both companies face regulatory risk. Polymarket is under investigation by the U.S. Commodity Futures Trading Commission following reports of misleading marketing tactics. The company said it launched an audit of its promotional efforts to make sure it complies with legal disclosure requirements.
Kalshi faces a separate challenge. New York Attorney General Letitia James filed a lawsuit in New York Supreme Court last week claiming the platform is an illegal gambling business. The suit seeks compensatory damages that could total as much as $36 billion.
New York Governor Kathy Hochul said in a joint statement that Kalshi "has chosen to ignore New York's gaming laws, which exist to protect consumers, prevent problematic gambling, deliver funding for critical public services, and ensure that every company plays by the same rules." Kalshi called the action "political theater" and filed a petition to move the case to federal court within hours of the filing.
The CFTC investigation and the New York lawsuit add to the regulatory overhang for both prediction market platforms. Kalshi's petition to move the case to federal court is pending.
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