Polymarket, a prediction market platform, appears set to raise funds for its next major round. In a report released on Monday by The Information, the company was said to be in talks with various investors about raising $400 million in new capital.

According to the report, Polymarket’s valuation could reach up to $15 billion, citing sources close to the deal. This fundraising exercise will capitalize on the growing trend of institutional investments in prediction markets over the last few months.

Polymarket Targets $1B Amid Competition

In mid-March, Intercontinental Exchange (ICE), which owns the New York Stock Exchange, put in $600 million into Polymarket. Meanwhile, the competing exchange Kalshi was valued at around $22 billion in its recent fundraising campaign. It is believed that Polymarket is seeking to go beyond ICE in acquiring strategic investors, which may push the total amount raised to $1 billion.

Prediction markets have grown tremendously after the 2024 US Presidential elections, with monthly trading amounts surpassing $10 billion every month. Such online sites offer users an opportunity to bet on many kinds of events, like politics, sporting events, financial results, and other cultural phenomena.

The increase in action has not gone unnoticed by big financial institutions. On March 5, Nasdaq’s options market, Nasdaq MRX, registered its intention to offer cash-settled binary options based on the Nasdaq-100 index. At the same time, Cboe Global Markets is developing its own prediction-type products, while CME Group works in tandem with FanDuel for non-financial markets.

Firms that operate in traditional finance are also investigating the area. Recently, Charles Schwab and Citadel Securities revealed their interest in entering the prediction market industry.

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Kalshi Lawsuit Raises Regulatory Uncertainty

Nevertheless, issues regarding regulation continue to be a significant concern. There have been some concerns raised against platforms such as Kalshi in relation to market manipulation and insider trading. Indeed, Kalshi is facing an ongoing lawsuit from the Nevada Gaming Control Board on account of its alleged unlicensed gambling activities through contracts.

Paul Grewal, Coinbase’s general counsel, believes that it is possible that this lawsuit will eventually be brought before the US Supreme Court, which would set a legal precedent for predicting events and event-based derivatives in the future.

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