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Exchange that lets investors trade on event outcomes raises $30m

Kalshi, a Silicon Valley-based online exchange that lets users trade on the outcome of real-world events, has raised $30 million in a Series A funding round led by Sequoia Capital.

The round was joined by Charles Schwab of Charles Schwab Corporation, Henry Kravis, the co-CEO of KKR, SV Angel, and previous investors including Neo and YC Continuity.

The money comes on the heels of the CFTC approving Kalshi as a Designated Contract Market (DCM) in November, paving the way for it to launch the platform.

Kalshi will offer a unique asset class: event contracts. Investors buy either "Yes" or "No" contracts based on whether they think the event will happen or not, allowing them to hedge everyday risks and capitalise on their opinions. A waitlist programme is currently operating.

Tarek Mansour, CEO, Kalshi, says: “The universe of what has financial value is expanding rapidly. Markets for information, digital assets and even sneakers are becoming just as valuable as legacy markets for commodities, such as oil, crops and gold.

“It’s clear that derivatives markets have some catching up to do, which is why Kalshi will offer event contracts as a novel asset class that covers a broad range of topics. These contracts will become a powerful instrument in the modern investor’s toolkit.”

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Editorial | what does this mean?

This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community.

Comments: (2)

A Finextra member 19 February, 2021, 13:26

1 like

Isn't "trading on event outcomes" too long as a substitute to the well established term 'gambling'?

It's a bit like... not calling a spade a spade, but instead calling it "manually operated earth-moving equipment" 😜

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Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 22 February, 2021, 12:10

1 like

LOL. Apparently, Kalshi is not limited to gambling.

In a recent issue of Money Stuff, Matt Levine gave an example of how Kalshi could make a huge market out of thin air:

"If Kalshi was around this week presumably it would have made markets in, like, “Will Keith Gill Wear a Headband to the GameStop Hearing,” and hundreds of millions of dollars would have changed hands on that contract, and there’d be sob stories about people who bet yes and lost their houses, and there’d be insinuations about insider trading by people with confidential knowledge of Gill’s sartorial choices, and there’d be a whole other congressional hearing to grill Kalshi’s executives about the integrity of prediction markets."