Kalshi is negotiating a new funding round at a $65 billion valuation, according to Bloomberg — barely weeks after closing a financing that put the company at $40 billion. A Kalshi spokesperson declined to comment on the talks.

The speed is the story. The $40 billion round, disclosed in late October, had been viewed as Kalshi's final private raise before an initial public offering, Bloomberg reported. The company chose to raise private money again instead of heading to market. And here's the notable part: market volatility played no role in that decision, per Bloomberg's reporting.

What is Kalshi, and where does the money come from?

Founded in 2018, Kalshi sells financial contracts whose payouts depend on how real-world events turn out — a prediction market, in industry terms. Sports betting has driven the bulk of trading on the platform over the past year, according to Bloomberg.

The growth numbers explain why investors keep re-upping. Kalshi's monthly notional trading volume (the total value of contracts traded, before netting) more than doubled between August and October — from $40 billion to close to $100 billion, Bloomberg reported. That's a swing of nearly $60 billion in two months.

Three figures stand out from the funding documentation Bloomberg says it reviewed:

• Gross margins of roughly 90% at the time of the last round
• Annual run rate above $5 billion — a projection of yearly revenue if current activity holds steady
• Monthly trading volume near $100 billion as of October

Margins like that are rare. Software businesses chase them. Kalshi appears to have found them in event contracts, with sports volume doing the heavy lifting.

Why is politics suddenly part of this story?

Kalshi's financial and betting products have drawn backing from the Trump administration, Bloomberg notes. That support mattered — it shaped the regulatory environment in which prediction markets could expand.

The political weather is shifting. Democrats, who have been more critical of prediction markets, gained ground in the midterm elections, and scrutiny of Kalshi's products has increased as a result, according to Bloomberg. A company whose fortunes rose with one administration now faces a Congress where the opposition party holds more leverage. The $65 billion valuation talks are happening inside that tension.

What happened with Donald Trump Jr.?

Kalshi announced Thursday that it had cut ties with Donald Trump Jr., one of its advisers. The company pointed to his connection with Polymarket, Kalshi's chief competitor, as the reason, Bloomberg reported.

The move is small on paper — one adviser gone — but the logic is clean. An adviser simultaneously tied to your main rival is a conflict, and Kalshi apparently decided the optics and the substance no longer worked. It also removes a visible Trump-family link at exactly the moment Democratic scrutiny of the platform is rising.

Does the $65 billion talk make sense?

The arithmetic is aggressive but not irrational. A company that doubled monthly volume from $40 billion to nearly $100 billion in two months, with 90% gross margins and a $5 billion-plus run rate, can argue for a steep step-up from $40 billion. Whether investors accept $65 billion — a 62.5% jump on the October valuation — depends on whether October's volume surge holds.

Two unknowns hang over the deal. It's still a negotiation, not a closed round, and valuations discussed in talks can move before term sheets are signed. And the regulatory climate, once a tailwind, has turned less predictable.

What's certain: Kalshi passed on the IPO window its own investors expected, and it's going back to private markets for the second time in a matter of weeks. That decision says the company believes it's worth more than the public market would currently pay — or that it wants more time to prove it.