Despite bitter rivalry, Kalshi, Polymarket CEOs back $35M predictions markets VC fund

Few rivalries in the startup ecosystem are as intense (and occasionally bitter) as the race between Polymarket and Kalshi for dominance in the rapidly growing prediction market arena.

Despite their fierce competition, the CEOs of both companies are investing in 5(c) Capital, a new prediction market-focused VC firm launched by former Kalshi employees, Fortune and Bloomberg reported.

5(c) Capital, a name that references a regulatory clause governing prediction markets, is raising $35 million for its first fund. Besides Kalshi CEO Tarek Mansour and Polymarket CEO Shayne Coplan, notable investors in the fund reportedly include Marc Andreessen, through his investment in a fund Moneta Luna, and Ribbit Capital founder Micky Malka.

Kalshi confirmed that Mansour is investing in the fund. Polymarket didn’t respond to our request for comment.

5(c) Capital seeks to back founders who “want to capitalize on the second-, third-, and fourth-order effects” of the rapidly growing prediction markets, they reportedly wrote in the investment memo.  The fund will invest in about 20 companies, focusing on the category’s infrastructure, including market makers and index designers.

The new fund is led by partners Adhi Rajaprabhakaran, a Kalshi trader hired by the company, and Noah Zingler-Sternig, Kalshi’s former head of operations.

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