Sequoia and Wellington co-led the round. The prediction-market operator's valuation rose about 1.8 times in roughly five months, even as state regulators escalate their fight over sports contracts.
Kalshi's newest investors bought in while its legal fight with the states was already well under way.
The prediction-market operator said on Thursday it raised $1 billion at a $40 billion valuation, in a round co-led by Sequoia and Wellington. In May it raised $1 billion at $22 billion, in a round led by Coatue. The new valuation is about 1.8 times the old one, an increase of about 82% in roughly five months.
The timing
The round was announced one day after Utah filed criminal charges against Kalshi and its co-founders, Chief Executive Tarek Mansour and Chief Operating Officer Luana Lopes Lara. The state brought 14 counts, including 12 third-degree felony counts of online gambling promotion, based on sports wagers placed by an undercover investigator. Kalshi called the charges "crazy overreach." No one has been convicted. The round itself closed the previous week, before the criminal charges were filed, the company told the New York Times.
The federal government is on Kalshi's side of the underlying dispute. On Oct. 26, the United States and the Commodity Futures Trading Commission sued Utah, arguing that event contracts are federally regulated and that federal law overrides state gambling rules. Utah has prevailed in federal court so far, winning summary judgment in August.
Kalshi is also expanding beyond event contracts, including into perpetual futures approved by the CFTC.
What the price implies
A 1.8-times markup in five months, from investors of the caliber of Sequoia and Wellington, suggests they treated the state cases as a cost of doing business rather than a threat to the model. It also reflects how quickly the category has grown into a business that matters for listed brokers, with Robinhood reporting that its event-contract revenue exceeded its crypto revenue in the third quarter.
Mansour told the New York Times there have been discussions about a public listing. No filing has been made.
Momentum or peak pricing?
The momentum view: Kalshi is growing fast, the federal regulator is defending it, and top-tier investors committed $1 billion with the civil litigation already under way.
The peak-pricing view: the valuation has nearly doubled while legal risk has escalated from civil suits to criminal charges against named founders, and other states could follow Utah. A loss on the pre-emption question would affect the core sports business.
What to watch
The first court date in Utah's criminal case, rulings in the federal suit against Utah, action by other states, the full investor list for the round, and any move toward a listing.