Kalshi, a U.S. prediction market platform, has reportedly elevated its valuation to approximately $11 billion after securing $1 billion in a recent funding round, as initially reported by TechCrunch, citing a knowledgeable source. This valuation surge is one of the most significant in the prediction market sector this year. The company completed this funding round just weeks after raising $300 million at a $5 billion valuation in October. Kalshi has seen continuous growth in trading activity, market depth, and user engagement as it enters the last quarter of the year, with its annualized trading volume reaching nearly $50 billion last month, according to data from crypto analytics platform CryptoRank. This marks a stark increase from around $300 million one year earlier, as noted by the New York Times. Furthermore, Kalshi outperformed its primary competitor, Polymarket, generating about $4.4 billion in trading volume last month, compared to Polymarket’s $4.1 billion during the same period. Approximately one-third of bets placed on Kalshi involve sports markets, as indicated by a Dune dashboard. The weekly notional volume among prediction markets has experienced consistent growth since September, according to a more comprehensive dashboard from the same source. Sequoia Capital and CapitalG are reported to have led this recent funding round, joined by Andreessen Horowitz, Paradigm, Anthos Capital, Neo, and other returning investors. Farokh Sarmad, co-founder and president of rival platform Myriad, expressed that Kalshi’s recent funding demonstrates the increasing potential for prediction markets, stating, „The ceiling is only getting higher, and we haven’t seen anything yet.“ Kalshi opted not to comment for this article. Decrypt has reached out to all mentioned investors for further insights and will update the article upon receiving responses. The legality of prediction markets has been a longstanding challenge in the U.S., where they exist in a gray area between regulated derivatives and prohibited gambling, presenting jurisdictional dilemmas that have shaped the industry’s development. Last year, Kalshi triumphed in a high-profile lawsuit against the Commodity Futures Trading Commission, gaining the right to offer election markets to U.S. users. This ruling spurred domestic growth but raised new challenges with state regulators who categorize certain contracts as gambling rather than federally regulated derivatives. Following this, in May, the Commodity Futures Trading Commission withdrew its appeal against Kalshi’s victory, which allowed the company to provide U.S. contracts on election outcomes. However, the company still faces ongoing disputes with several state regulators who contend that its contracts fall under gambling laws instead of commodities regulation. Meanwhile, its competitor Polymarket recently gained approval from the same regulator to operate in the U.S., after years in which it was fined and forced offshore due to non-compliance with federal regulations.