Kalshi Finalizing $1 Billion Raise at $40 Billion Valuation Ahead of IPO
Bloomberg reported on September 30 that Kalshi is finalizing a new funding round worth approximately $1 billion at a valuation of around $40 billion, expected to be the company's last private fundraise before an initial public offering. The round is being led by Sequoia Capital and Wellington Management, with Tiger Global and Dragoneer Investment Group also participating. The $40 billion valuation represents a nearly four-fold increase from Kalshi's $11 billion valuation in December 2025, a doubling from its $22 billion valuation in March 2026, and would make Kalshi one of the most valuable private fintech companies in the United States.
Kalshi is finalizing a new funding round of approximately $1 billion at a valuation of around $40 billion, Bloomberg reported on September 30, 2026. The round is being led by existing investor Sequoia Capital and Wellington Management, with Tiger Global Management and Dragoneer Investment Group among the additional investors expected to participate. The new financing is expected to be the company's last private fundraise before an initial public offering, which could come as early as 2027. The $40 billion valuation represents a dramatic compression of the distance between Kalshi's private valuation and a potential public market capitalization: the company was valued at $11 billion in December 2025, $22 billion in March 2026, and would nearly double again in a new round concluded roughly six months later. The trajectory — $11B to $22B to $40B in roughly ten months — reflects the surge in prediction market trading volumes, the sector's growing institutional acceptance, and Kalshi's dominant market position with approximately 80-92% of combined Kalshi-Polymarket trading volume.
The $40 billion valuation is calibrated against Kalshi's commercial position and growth rate, but it is also a bet that the legal and regulatory uncertainty will resolve favorably. The company is actively defending itself or awaiting judgment in more than ten states; the Ninth and Sixth Circuits have both ruled against CFTC preemption of state gambling laws; the SCOTUS cert petitions from New Jersey and Robinhood are pending. A public company trading at 40x revenue — or whatever multiple the IPO price implies — would need the legal cloud to clear before retail investors could price the stock with confidence. The IPO timeline of 'as early as 2027' aligns with the SCOTUS October 2026-June 2027 term in which the prediction market cases are expected to be decided: if the Court grants cert and rules for Kalshi by June 2027, the company would approach a 2027 IPO with a resolved national legal framework. If SCOTUS has not acted or has ruled against Kalshi, a 2027 IPO would require investors to price in ongoing legal uncertainty across multiple states.
Sequoia's continued participation as lead investor is significant. Sequoia was among Kalshi's earlier backers and has maintained and increased its position through successive rounds — from a smaller early-stage check to a lead role in what may be the pre-IPO round. The addition of Wellington Management, a traditional institutional asset manager known for fundamental long-term investing in public equities rather than early-stage venture risk, is the more notable new signal. Wellington's participation suggests that the perception of Kalshi has shifted from a high-risk venture bet on a contested regulatory outcome to a pre-IPO growth investment in a dominant market-share position in a category that institutional investors believe will have a regulated future. Dragoneer and Tiger Global are known for large late-stage bets on pre-IPO fintech and technology companies; their inclusion is consistent with the round's positioning as the final private raise.
Polymarket closed a $1 billion financing round on September 1, 2026, at a valuation reported in the range of $15-20 billion — approximately half of Kalshi's new $40 billion round valuation. Kalshi's valuation premium over Polymarket has widened significantly in 2026: the two companies were more closely valued in early 2025. The gap reflects Kalshi's market share growth — from a more competitive position in 2025 to 80-92% of combined volume in 2026 — and Kalshi's stronger US regulatory standing as a CFTC-registered designated contract market (Polymarket US has a narrower DCM scope following its 2022 CFTC settlement). Both companies are moving toward public markets: Kalshi with an IPO potentially in 2027, Polymarket with its own IPO process reportedly in early stages. The prediction market sector is transitioning from a contested regulatory frontier to a mainstream financial infrastructure play in the eyes of the institutional investors who are writing the largest pre-IPO checks.
Operators mentioned in this article
Recent updates
Czech Republic Blocks Kalshi From October 15 — Polymarket Already Blocked Since July
The Czech Ministry of Finance added Kalshi to its list of unauthorized gambling operators on September 30, requiring ISPs to block the platform by October 15, 2026. Polymarket was similarly blocked by Czech authorities in July 2026. The Czech Institute for Gambling Regulation (IPRH), representing over 90% of the Czech licensed gambling sector, brought the Kalshi case forward. Czech authorities describe prediction markets as betting products that market themselves as investment tools. Kalshi and Polymarket are now blocked or under active enforcement in at least six European jurisdictions: Czech Republic, Belgium, France, Romania, Spain, and Germany.
SCOTUS Publishes First Orders List — No Prediction Market Cases Granted Yet
The Supreme Court published its first orders list of the October 2026-2027 term on October 2, granting certiorari in three cases — none of them prediction market cases. The absence was expected: response briefs from Kalshi to the New Jersey petition (filed September 2) and the Robinhood petition (filed September 9) are still pending. The Court typically considers cert petitions a few weeks after all responses are received. Legal observers expect the prediction market cert decision to come in late October or November 2026.
Sixth Circuit Joins Ninth Against Kalshi — Ohio and Tennessee Can Regulate Sports Contracts
The Sixth Circuit Court of Appeals ruled unanimously on September 25 that Ohio and Tennessee may apply their state gambling laws to Kalshi's sports event contracts, rejecting Kalshi's CFTC-preemption argument. The panel held that Kalshi's sports contracts are not 'swaps' under the Commodity Exchange Act, and added an alternative holding that even if they were swaps, the CEA does not preempt state gambling law. The ruling deepens the circuit split to 2-1 against Kalshi: the Third Circuit ruled for Kalshi in April; the Ninth Circuit ruled against in August; now the Sixth Circuit has ruled against. The ruling is expected to significantly increase the probability that the Supreme Court grants certiorari in the pending petitions from New Jersey and Robinhood.