Prediction-market exchange Kalshi is in advanced talks to raise roughly $1 billion at a valuation of approximately $40 billion, Reuters reported Sept. 29, citing people familiar with the matter. The round is not complete; Reuters' sources expect the financing to finalize in the coming weeks.

Sequoia Capital, an existing backer, and Wellington Management are in talks to lead the financing, according to Reuters. New investors Tiger Global Management and Dragoneer Investment Group are also prospective participants. Kalshi and Tiger Global declined to comment to Reuters.

The proposed $40 billion valuation would sit about 82% above the $22 billion price Kalshi confirmed on May 7, when it closed a $1 billion Series F led by Coatue with participation from Sequoia, Andreessen Horowitz and Morgan Stanley. The $40 billion figure first surfaced in June, when the Financial Times reported fundraising talks at that level seven weeks after the Series F closed.

Kalshi has framed its capital strategy around institutional distribution rather than retail growth. In its May announcement, the company said it would deploy the Series F proceeds to deepen adoption among hedge funds, asset managers, proprietary trading firms and insurers, while expanding its product suite and broker integrations. The company highlighted recently launched block trading capabilities as a core component of that push — functionality designed to let large counterparties execute size without moving the order book, a prerequisite for institutional flow.

A raise at $40 billion would also widen the valuation gap between Kalshi and its closest competitor. Polymarket is separately in discussions to raise $1 billion, Reuters reported, citing people familiar with the matter. Bloomberg reported on Aug. 31 that a Polymarket round led by 1789 Capital would value the company at $21 billion after the investment, with 1789 contributing around $300 million. Those terms place Polymarket's prospective valuation at roughly half the level under discussion for Kalshi.

The fundraising talks run parallel to Kalshi's regulatory agenda in derivatives. In a Sept. 18 filing with the Commodity Futures Trading Commission, Kalshi proposed equity perpetual futures that would trade overnight but compute funding premiums only during the regular cash-equity session. That structure departs from the basis of the CFTC's May order approving Kalshi's bitcoin perpetuals, which relied on continuously observable spot prices and round-the-clock arbitrage to keep contracts aligned with their underlying asset. The CFTC's approval explicitly limited its analysis to digital commodities, meaning the equity product raises new questions about how a perpetual stays tethered to an underlying market when that market is closed. A contract could keep trading overnight without adding closed-market observations to its funding-premium calculation — a distinction between extending trading access and extending the observation window that underpins price convergence.

If the financing closes in the coming weeks as Reuters' sources anticipate, Kalshi would enter its next phase of product expansion — including the pending equity perpetuals proposal — with roughly double the capital base it disclosed in May, pending CFTC review of the funding-mechanics questions its Sept. 18 filing raises.