The prediction markets company is in early discussions with prospective investors to raise about $1 billion, Bloomberg News reported Tuesday (Aug. 4), citing sources familiar with the matter. Assuming the round closes, Polymarket will be worth more than double the amount it was when it raised capital at a valuation of $9 billion last October, the report said. The company completed a round at a $15 billion valuation in April.
Bloomberg added that Polymarket’s main competitor Kalshi had said in May it had landed an investment, placing its value at $22 billion. Kalshi has outpaced Polymarket’s growth since the start of the year as the latter company suffered operational and legal issues, the report said.
Polymarket, which lets users put money on the outcome of actual events, has since opened its American platform and seen annualized revenue triple to more than $1.2 billion, the sources said. Prediction market betting surged during the World Cup this summer.
However, Kalshi in July hosted three times more trading volume than Polymarket, Bloomberg said, citing user-compiled data from Dune Analytics.
Meanwhile, Polymarket is under investigation by the U.S. Commodity Futures Trading Commission (CFTC) following reports that it engaged in misleading marketing tactics. According to Bloomberg, the company has said it launched an audit of its active promotional efforts to make sure it complies with regulatory and legal disclosure requirements.
Meanwhile, Kalshi is facing legal troubles of its own, with New York State Attorney General Letitia James filing a lawsuit against the company in New York Supreme Court in Manhattan last week claiming the platform is an illegal gambling business. The suit seeks compensatory damages that could add up to as much as $36 billion.
“Kalshi has chosen to ignore New York’s gaming laws, which exist to protect consumers, prevent problematic gambling, deliver funding for critical public services, and ensure that every company plays by the same rules,” New York Gov. Kathy Hochul said in a joint statement issued by James’ office. “This choice has consequences, and working closely with Attorney General James, New York is taking action to stop this illegal behavior and bring Kalshi into compliance, because no company is above the law.”
Kalshi, which is based in New York, had expected the suit and filed a petition seeking to have the case sent to federal court within hours of James’ filing, calling the action “political theater from the leadership in our own state.”
