Polymarket Values at $1 Billion Despite U.S. Regulatory Hurdles

Peter Thiel’s venture firm is leading a nine-figure Series C round that values the on-chain prediction market at $1 billion, despite U.S. regulators still blocking the platform from its largest potential audience. Polymarket, a blockchain-based prediction platform, allows traders to bet on a variety of events, from the U.S. presidential race to Taylor Swift’s tour dates. The platform is set to raise $200 million in fresh capital, with Peter Thiel’s Founders Fund as the lead investor. This deal will elevate Polymarket’s post-money valuation to approximately $1 billion, making it one of the first blockchain-native betting venues to achieve “unicorn” status.

Founders Fund, which had previously invested in Polymarket during a $45 million Series B round in May 2024, is doubling down with what sources describe as its largest single investment in a decentralized-finance startup to date. Partner Joey Krug noted that the firm’s partners had developed a habit of checking Polymarket during breaking news events, concluding that Polymarket was the leading platform in this market. This investment bridges the gap between blue-chip Silicon Valley capital and an industry that is still navigating the gray areas of U.S. gambling law.

Several factors contribute to the appeal of Polymarket for venture capitalists. Record engagement saw monthly active traders surpass 475,000 during the U.S. Election, with open interest hitting $463 million, both all-time highs. The 2024 U.S. Election campaign alone cleared more than $2 billion in bets, providing Polymarket with a live demonstration of its “wisdom of crowds” thesis. Additionally, a recent partnership with Elon Musk’s X app allows Polymarket odds to be surfaced natively through its Grok AI assistant, exposing the venue to over 600 million monthly users.

Despite its momentum, Polymarket remains officially off-limits to U.S. residents. In January 2022, the company paid a $1.4 million fine to settle charges from the Commodity Futures Trading Commission that it hosted unregistered event-based swaps. The site now geoblocks American IP addresses, but law-enforcement pressure has not eased, as evidenced by the FBI’s search of founder Shayne Coplan’s New York apartment in November. This legal shadow is significant because the United States is the world’s most lucrative betting market. Venture analysts suggest that the valuation Founders Fund is paying only makes sense if Polymarket eventually gains access to the U.S. market.

Polymarket’s blockchain-native model contrasts with regulated “cash market” rival Kalshi, which has spent three years and millions in legal fees seeking CFTC approval to list political contracts. Other decentralized entrants offer lower fees or sport-specific markets but have yet to match Polymarket’s liquidity, and none has publicly disclosed a valuation exceeding $1 billion. The regulatory environment remains a critical factor in determining whether Polymarket can convert its headline traction into a sustainable, legal, and mainstream business. Founders Fund’s significant investment signals that some of Silicon Valley’s most influential investors believe the regulatory odds will eventually favor Polymarket. Until then, the unicorn status of Polymarket sits on a platform still barred from the world’s richest pool of bettors, presenting a significant risk.