Several major hedge funds, including, Balyasny, Millennium, and Tiger Global, have participated in a $1bn funding round for prediction market platform Kalshi, valuing the company at $40bn, according to a report by Institutional Investor.

The Series G financing, co-led by Wellington and Sequoia Capital, nearly doubles Kalshi's valuation from the $22bn achieved in its previous $1bn funding round less than six months earlier. Coatue and Balyasny were confirmed as participants in the latest round, while Millennium and Tiger Global were also identified as investors by Crunchbase.

The investment reflects growing hedge fund interest in prediction markets and alternative trading infrastructure as Kalshi expands beyond event-based contracts into cryptocurrency, commodities, economic indicators and perpetual futures. The company reported more than $1tn in annualised trading volume, over 30 million registered accounts and a market share exceeding 75% of prediction market trading activity.

Kalshi said its non-sports business now generates more than $1bn in annualised revenue, with cryptocurrency trading reaching $140bn in annualised volume and its recently launched perpetual futures platform recording $83bn in trading activity. Its commodities business has also surpassed $100m in annualised trading fees within three months.

The expansion comes as prediction markets attract increasing institutional attention, with Kalshi targeting hedge funds, asset managers and proprietary trading firms seeking additional trading and hedging opportunities.

However, the sector continues to face regulatory scrutiny, with Utah filing criminal charges against Kalshi and its co-founders over alleged gambling law violations. The Commodity Futures Trading Commission has subsequently challenged the state's investigation, highlighting ongoing uncertainty over the regulatory treatment of prediction market contracts.