Kalshi Explores IPO As Its Prediction Market Surges

Prediction market Kalshi is reportedly exploring an initial public offering (IPO) as its platform explodes in popularity among individual retail investors. 

Media reports say that Kalshi has begun early discussions with investment banks about a potential IPO as its annual revenue run rate surpasses $2 billion U.S. 

Kalshi has seen its revenue more than double from a $1 billion U.S. annualized run rate in March of this year.

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Prediction markets let people bet on the outcome of real-world events such as elections, sporting events, and even the weather. 

Reports that the company is pursuing an IPO come after Kalshi recently secured $1 billion U.S. in funding at a $22 billion U.S. valuation. 

The latest funding round included participation from venture capital firm Andreessen Horowitz, investment bank Morgan Stanley (NYSE: $MS), and asset manager ARK Invest.

A potential IPO surfaces as trading activity on Kalshi continues to soar. Kalshi recorded $16.81 billion U.S. in trading volumes in May of this year, up from $14.81 billion U.S. in April. 

New York City-based Kalshi is by far the largest prediction market currently. Competing platform Polymarket generated $7.08 billion U.S. of trading volumes in May, less than half Kalshi’s rate.

One thing that could delay an IPO from Kalshi, say analysts, are multiple lawsuits against the company. Several U.S. states are suing Kalshi, saying it runs an illegal gambling operation.

If it were to go public, Kalshi would join a growing list of high-profile IPOs this year that are also expected to include artificial intelligence (A.I.) startups Anthropic and OpenAI.