Kalshi and Polymarket jointly fund a new fund, a major step towards the "ecologization" of prediction markets.

Original｜Odaily Planet Daily（@OdailyChina）

Author｜Wenser（@wenser2010）

The trading volume of prediction markets is rising steadily, and its ecosystem is rapidly expanding.

Yesterday, a new fundraising plan was released by the venture capital firm 5c© Capital, founded by two former Kalshi employees, aiming to raise $35 million for investments in startups related to prediction markets. Notably, this firm has the support of Kalshi CEO Tarek Mansour and Polymarket CEO Shayne Coplan, among others, with additional investors including individuals from a16z, Ribbit Capital, and Multicoin Capital.

At the same time, this firm is not only the first venture capital firm focused on investing in the prediction market industry but also the same entity that received investments from both Kalshi and Polymarket, the two giants of the prediction market, making it an “unprecedented industry occurrence.” Considering Kalshi’s previous initiatives to form a prediction market alliance, plans to hold a prediction market conference, Polymarket’s opening of LP market-making incentives, and the emergence of various prediction market data platforms, the prediction market is gradually separating from the native crypto market and becoming an independent emerging industry ecosystem.

When an industry’s trading volume achieves tenfold growth in just one year, and when a platform’s monthly trading volume can rival the entire industry’s trading volume from just months ago, the prediction market is forcefully penetrating the territory of traditional betting platforms.

Polymarket CEO Invests in Former Kalshi Employee: A Joint Choice of the Prediction Market Duopoly

It is understood that the name of 5c© Capital is derived from the clause regarding prediction markets in the U.S. Commodity Exchange Act.

The two founders are veteran figures from Kalshi — Adhi Rajaprabhakaran was the No. 2 trader in Kalshi’s affiliated market-making department, Kalshi Trading, and is also the creator of the well-known prediction market podcast “50 Cent Dollars”; Noah Zingler-Sternig served as the Chief Operating Officer (similar to COO) of Kalshi and led its integration with Robinhood Markets Inc.

Additionally, the fund plans to invest in about 20 companies over the next two years, focusing on market makers, index design, and other foundational infrastructure for prediction markets; its first round of fundraising is set to be completed within the next month.

A Luxurious Investor Lineup: Spanning Traditional VC, Crypto VC, Prediction Markets, and Traditional Sports Betting Platforms

In addition to confirmed investors Kalshi CEO Tarek Mansour and Polymarket CEO Shayne Coplan, who did not provide a direct response, the other investors in 5c© Capital can be described as a “luxurious team” — including seasoned venture capitalist Marc Andreessen from A16z (who participated through the Moneta Luna fund), Ribbit Capital founder Micky Malka, and former Multicoin Capital managing partner Kyle Samani, as well as investment managers from the hedge fund Millennium, which has over $70 billion in assets under management, and founders of the prediction market platform PredictIt, among other industry insiders and outsiders.

If the above list of investors reflects primarily the interests of venture capital firms, then the actions of the following two investors can be considered as “industry demand behavior” similar to that of Polymarket and Kalshi. It is understood that Jeremy Levine, CEO of the fantasy sports platform Underdog, and Jacob Fortinsky, CEO of the sports prediction platform Novig, are also listed.

It is evident that, as the industry rapidly develops, both prediction market platforms and traditional sports betting platforms are exploring various ways to solidify their developmental foundations.

The Ambition of the New Prediction Market Fund: Future Industry Trading Volume Could Reach $10 Trillion

It is worth noting that the two founders of 5c© Capital mentioned two key pieces of information in this investment document:

Firstly, they explicitly stated, “We hope to utilize our own constructed (product platform) to create more secondary, tertiary, and even quaternary effects.” From their remarks, it is clear that they are targeting not only the primary investments in the construction of prediction market platforms but also capital investments in various segmented tracks generated by prediction market platforms, risk management, equity trading, and further layers of liquidity attraction and inflow/outflow.

Secondly, regarding the future development of the industry, the document pointed out, “Currently, prediction markets seem limited to the sports track, but this is only a part of the industry; the future trading volume of this industry could reach $10 trillion.”

Not to mention, recent operational data from Kalshi might corroborate this: as of March 22, Kalshi’s monthly nominal trading volume has exceeded $9 billion. At this rate, Kalshi’s trading volume in March is expected to exceed $12.7 billion, a month-over-month increase of 21.5%. In comparison, Kalshi’s annual nominal trading volume in 2025 is projected to be around $23.8 billion, meaning that in just one month (March), Kalshi’s trading volume will reach about 53.4% of last year’s total trading volume. Additionally, last October, the overall trading volume of the prediction market industry was around $10 billion, while now, Kalshi alone has surpassed this figure.

Previously, Odaily Planet Daily had predicted in several articles that prediction markets would become another trillion-dollar industry track independent of the cryptocurrency market; it seems that this prediction is gradually becoming a reality.

Prediction Markets Separating from the Crypto Market to Form an Independent Ecosystem: Funds, Industry Alliances, Data Services, APIs, and More Forming a Closed Loop

In an era where AI is becoming a significant driving force in the global economic system, prediction markets are another rare fast-growing track, and their closed-loop ecosystem is rapidly improving.

In addition to the aforementioned $35 million industry fund, the prediction market industry is gradually completing its own foundational infrastructure, industry organizations, and application platforms.

Last December, Coinbase announced the acquisition of The Clearing Company, a prediction market platform founded by former employees of Kalshi and Polymarket. Although the specific amount of this acquisition has not been disclosed, the company had previously completed a $15 million seed round of financing and is one of the rapidly advancing challengers in the industry.

During the same period, five well-known institutions, including Kalshi, Crypto.com, Robinhood, Coinbase, and Underdog, jointly announced the formation of the Coalition for Prediction Markets (CPM). Recommended reading: “Kalshi Allies with Coinbase, Robinhood, etc., Aiming to End the ‘Casino Argument’.”

At the end of last year, Tarek Mansour, co-founder and CEO of Kalshi, issued a call to plan the first Prediction Market Conference in March 2026, where researchers, economists, policymakers, and traders will discuss core issues related to prediction markets and knowledge aggregation.

In February of this year, Polymarket officially announced its second official acquisition, acquiring the prediction market API startup Dome, which is a Y Combinator 2025 fall incubator project that provides a unified prediction market API, helping developers build applications, trading bots, and data panels that can connect with multiple platforms, including Polymarket and Kalshi. It previously received $500,000 in Y Combinator investment and completed a $4.7 million seed round of financing. Its first official acquisition was the acquisition of the U.S.-licensed derivatives exchange QCEX, facilitating its return to the U.S. market.

As the industry trading volume continues to grow, data analysis platforms targeting prediction market platforms are emerging one after another, including: Parity, Predictefy, and KalshiData.

Additionally, numerous on-chain trading tools and AI Agent trading tools for Polymarket have emerged, including Insiders.bot, Hubble ai, and Alchemy’s AgentCard.

It is not an exaggeration to say that the upstream, midstream, and downstream of prediction markets are currently filled with investment and entrepreneurial opportunities; in the future, we will gradually discuss these in the series of articles “Guide to Entrepreneurship in the Crypto Bear Market.”

The Trend is Set, Waiting for the Bloom

Previously, Kalshi held the top position in prediction market platform valuation with a valuation of $22 billion, surpassing many traditional sports betting platforms such as FanDuel (also known as Flutter, $19 billion), DraftKings ($12.75 billion), and bet365 ($12 billion).

Moreover, U.S. CFTC Chairman Mike Selig has previously stated that prediction markets could become “truth machines” and is formulating regulatory rules and recruiting relevant talent. Thus, it can be seen that prediction markets are no longer a niche track within the crypto market; they have become a significant benchmark emerging industry in the golden era of the U.S. financial market.

Although there are reports that U.S. legislators will propose a bipartisan bill to prohibit prediction markets like Polymarket and Kalshi from making sports event predictions, this is yet another example of prediction markets transitioning from the margins to the mainstream.

After all, the fact that over 36% of U.S. voters are users of prediction market platforms cannot be ignored, and the monthly rising trading volume data from Kalshi, Polymarket, and other prediction market platforms is undeniable.

Recommended Reading

Why Prediction Markets Are Not Betting Platforms

The Future Competition of Prediction Markets: To the Left is the Casino, To the Right is News

Not Enough? The Two Giants of Prediction Markets Target the Big Cakes of Payments and AI

2025 Prediction Market Review: Total Trading Volume Exceeds $50 Billion, Duopoly Market Share Exceeds 97.5%