SAN FRANCISCO — Kalshi, the first federally regulated exchange dedicated to trading on event outcomes, has raised $30 million in Series A funding. The round was led by Sequoia Capital with participation from Charles Schwab, chairman of Charles Schwab Corporation, Henry Kravis, co-chairman & co-CEO of KKR, SV Angel and previous investors including Neo and YC Continuity.
The announcement comes on the heels of the Commodity Futures Trading Commission (CFTC) approving Kalshi as a Designated Contract Market (DCM) in November, making it one of just 16 DCMs in the U.S.
Kalshi will use the new funding to bring its exchange to market and enable the trading of a unique asset class: event contracts. Event contracts are structured as questions about future events. 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 capitalize on their opinions.
“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,” said Tarek Mansour, co-founder and CEO of Kalshi. “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.”
Kalshi was founded in 2018 by Tarek Mansour and Luana Lopes Lara. After exploring event driven hedging and investment products for institutional investors at Goldman Sachs and Citadel, Mansour and Lopes Lara identified the opportunity to create an event-focused asset class for retail investors. The founders dedicated Kalshi’s initial years to ensuring the sustainability of the company by becoming federally regulated. Since then, they’ve assembled a team that balances financial industry heavyweights with engineering firepower.
“Investing is about putting money behind an opinion of what will happen in the future. Yet, traditional assets like stocks don’t provide direct exposure to event outcomes,” said Lopes Lara, co-founder and Chief Operating Officer at Kalshi. “Kalshi solves this problem by allowing investors to strip away all the other noise that influences asset price and isolates trading on the event itself.”
Kalshi is currently operating a waitlist program for its exchange, which interested investors can sign up for here. The exchange will officially launch to the public next month.
“Kalshi is a category-defining company. Tarek, Luana and team have created an entirely new model for how we invest in and engage with what’s happening in the world,” said Alfred Lin, partner at Sequoia and Kalshi board member. “Kalshi’s debut comes at a time when retail investors are pushing for more access to financial markets and opportunities to participate.”
Lin led Sequoia’s investments in Doordash and Airbnb, which both went public in huge IPOs last December.