Kalshi valued at $2 billion in latest funding round, CEO says

(Reuters) -Kalshi has raised $185 million in a funding round that values the prediction marketplace at $2 billion, its CEO Tarek Mansour said in a post on X on Wednesday.

The round was led by crypto-focused investor Paradigm, Mansour said. Investment firms Sequoia, Multicoin, Neo and Bond Capital, and Citadel Securities CEO Peng Zhao also participated.

Kalshi offers its users opportunities to profit from predictions on everything from sports and entertainment to politics and the economy. Such event contracts have exploded in popularity since the U.S. presidential election last year.

Event contracts have stirred intense debate in financial markets in recent months. Proponents say they offer a more accurate way to predict real-world outcomes than traditional polls as they rely on traders with money at stake.

Critics, however, argue that these contracts amount to a "backdoor to gambling," a claim that Kalshi and its peers strongly dispute.

Kalshi was founded in 2018 by Mansour and Luana Lopes Lara, who met while studying at the Massachusetts Institute of Technology.

Following a successful court challenge against the Commodity Futures Trading Commission last year, the company gained approval to list contracts related to the White House race.

The ruling also encouraged others waiting to dip their toes into the sector. Robinhood, best known for its stock trading app, launched a prediction markets hub in March.

Kalshi's rival, Polymarket, is also close to raising $200 million in a round that values it at more than $1 billion, Reuters reported on Tuesday.

(Reporting by Niket Nishant in Bengaluru; Editing by Maju Samuel)