Kalshi's Latest Fundraising Round Valuation Reaches $22 Billion

On May 7th, according to the Financial Times, Kalshi's current round of financing was closed on Thursday with a valuation that has risen to $22 billion, led by Coatue, with Sequoia Capital, Andreessen Horowitz, and Morgan Stanley following suit.

This valuation has surpassed the market value of approximately $17 billion of Flutter, the mother company of the world's largest listed gambling group FanDuel, and is close to twice that of rival DraftKings.

Less than a year ago, Kalshi's valuation was only $5 billion, it rose to $11 billion in December last year, and this time it has doubled again, with a cumulative increase of over 400%.

CEO Tarek Mansour compared this growth rate to the AI track, stating that few tracks other than artificial intelligence can achieve scale expansion at such a speed in recent years. The platform's annual transaction volume has reached $178 billion in April this year, compared to only $5.5 billion in the same period last year.

In the 2024 U.S. presidential election, Kalshi successfully predicted Trump's victory, after which traffic and transaction volume both rose sharply. The current revenue mainly comes from sports betting.

According to DeFi Rate data, last month sports and "exotic" contracts accounted for about 85% of the transaction volume, but the newly raised funds will focus on bulk trading capabilities and risk products to attract institutional clients.

Bernstein analysts predict that the transaction volume of prediction markets could exceed $1 trillion by 2030, with sports contracts playing more of a traffic entry role in this logic.

Kalshi insists that its contracts should be regulated by the CFTC as derivatives, this qualification allows it to bypass state sports betting bans and gambling taxes, but several state-level gambling regulatory agencies have filed lawsuits against it.

This week, a federal judge issued an injunction temporarily preventing the Attorney General of Arizona from filing a criminal complaint against it, giving the platform some legal buffer.

This regulatory qualification dispute is yet to be concluded and will largely determine whether Kalshi can convert its current rapid growth into a sustainable business model.