Silicon Valley online-trading platform Kalshi has closed a Series A funding round for $30 million led by Sequoia Capital, with participation from Charles Schwab, Henry Kravis, SV Angel and previous investors including Neo and YC Continuity.
Kalshi is the first federally regulated platform to trade on event outcomes, the company said. The new funding coincides with Kalshi’s approval by the Commodity Futures Trading Commission (CFTC) as a Designated Contract Market (DCM). Kalshi is among 16 DCMs in the U.S.
“The universe of what has financial value is expanding rapidly. Markets for information, digital assets and even sneakers are becoming just as valuable as legacy markets for commodities, such as oil, crops and gold,” Tarek Mansour, co-founder and CEO of Kalshi, said in a press release on Wednesday (Feb. 17). “It’s clear that derivatives markets have some catching up to do, which is why Kalshi will offer event contracts as a novel asset class that covers a broad range of topics. These contracts will become a powerful instrument in the modern investor’s toolkit,” he added.
The funding will be used to take the platform live and enable the trading of event contracts, which are “structured as questions about future events,” the company said in the release. Investors can wager “yes” or “no” contracts based on what they think will happen, stated the release.
The startup was founded in 2018 by Mansour and Luana Lopes Lara, who together spotted an opportunity to develop an event-focused asset class for retail investors. They sought federal regulation and created a company with deep financial expertise as well as engineering muscle.
“Investing is about putting money behind an opinion of what will happen in the future. Yet, traditional assets like stocks don’t provide direct exposure to event outcomes,” said Lopes Lara, co-founder and COO. “Kalshi solves this problem by allowing investors to strip away all the other noise that influences asset price and isolates trading on the event itself.”
The company is planning to launch its exchange to the public next month and in the meantime has a waiting list.
The gamification of the stock market was spurred by the recent trading frenzy on Robinhood, which was triggered by a Reddit forum. Robinhood sought to level the investment playing field in the stock market.
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