Kalshi and Polymarket CEOs back new prediction market VC

A new venture capital firm, 5(c) Capital, is raising $35 million for its first fund to invest in the prediction market sector—defined as a marketplace for trading contracts based on the outcome of future events. The firm, which was launched by former Kalshi employees, derives its name from a regulatory clause governing prediction markets. Despite a highly competitive environment between the sector’s two platforms, the CEOs of both companies are backing the new venture. According to reports from Fortune and Bloomberg, Kalshi CEO Tarek Mansour and Polymarket CEO Shayne Coplan are reportedly investing in 5(c) Capital. Other notable investors in the fund reportedly include Marc Andreessen, who is investing through a fund called Moneta Luna, and Ribbit Capital founder Micky Malka. Kalshi has confirmed that Mansour is investing in the fund, while Polymarket did not respond to requests for comment. The backing from Mansour and Coplan represents a rare moment of alignment between the leaders of the two competing platforms, who are otherwise locked in an intense race for dominance in the prediction market arena.

The new fund is led by partners Adhi Rajaprabhakaran, a former Kalshi trader, and Noah Zingler-Sternig, who previously served as Kalshi’s head of operations. In its investment memo, 5(c) Capital stated that it seeks to back founders who “want to capitalize on the second-, third-, and fourth-order effects” of the sector. To achieve this, the fund plans to invest in about 20 companies. Its investment strategy will focus primarily on the category’s infrastructure, including market makers and index designers.

This fundraising effort comes during a period of valuation activity for both of the major prediction market platforms:

• Kalshi: The company is raising $1 billion at a $22 billion valuation, according to reports from The Wall Street Journal. This figure represents a two-fold increase from the $11 billion valuation the company achieved less than four months ago.
• Polymarket: The rival platform is reportedly in talks with investors for a new funding round that would value the company at $20 billion.

Why it matters

The joint investment from rival CEOs highlights a strategic alignment on the underlying infrastructure of prediction markets, suggesting that despite their fierce competition for market share, both leaders see value in fostering the broader ecosystem.