Regulated vs. Decentralized: Kalshi's $11B Surge Ignites Prediction Market Race

Kalshi's valuation has surged to $11 billion following a $1 billion funding round led by Sequoia Capital and CapitalG, according to multiple reports. The latest investment, announced in late November 2025, marks a significant leap from its $5 billion valuation in October, underscoring growing investor confidence in the prediction market sector. Andreessen Horowitz, Paradigm, Anthos Capital, and Neo also participated in the round, joining returning investors Sequoia and CapitalG according to reports.

The funding comes as Kalshi expands its global footprint to 140 countries and competes with rival prediction platform Polymarket, which is reportedly targeting a $12 billion to $15 billion valuation in its next funding round. Kalshi's regulated model, operating under the Commodity Futures Trading Commission (CFTC), differentiates it from Polymarket's decentralized approach. Both platforms have seen explosive growth in 2025, with combined trading volumes exceeding $17.4 billion since September, per DeFiLlama data. Kalshi dominates this market, capturing 61.4% of the trading volume over that period.

The prediction market space has intensified competition, particularly after both platforms gained prominence for accurately predicting the New York City mayoral election in November 2025. Kalshi's marketing efforts, such as subway ad campaigns during the race, further boosted its brand visibility. Meanwhile, Polymarket returned to the U.S. market in beta mode after regulatory challenges in 2022 and secured high-profile partnerships with the UFC, NHL, and Elon Musk's xAI.

Kalshi's recent integrations with financial platforms like Google Finance, Robinhood, and MetaMask have expanded its accessibility to retail and institutional traders. The company also announced a partnership with Barchart, a leading market data provider, to integrate its prediction market data into Barchart's tools and services. This collaboration aims to enhance financial decision-making by incorporating real-time event-based probability data.

The valuation surge reflects broader trends in the prediction market industry, which has attracted substantial venture capital interest. Kalshi's CFTC-regulated structure offers legal clarity, appealing to institutional investors wary of the regulatory risks associated with decentralized platforms. Polymarket, meanwhile, continues to push boundaries with product innovations like Bitcoin deposits and plans for a native token and stablecoin.

As both platforms vie for dominance, their strategies highlight the diverging paths of regulated and decentralized financial innovation. Kalshi's focus on fiat onramps and regulatory compliance contrasts with Polymarket's blockchain-driven, crypto-centric model according to reports. The race to capture market share and investor dollars is likely to accelerate as prediction markets evolve into mainstream financial tools.