A new Scale AI challenger hit $9M ARR in one year founded by an 18-year-girl
Kalshi valued at $5B as Prediction Markets are Exploding
A few days ago, Altimeter Capital partner Freda Duan shared a deep analysis of the Prediction Market trend. She said Prediction Markets are the Fastest-Growing New Species in Tech.
Today, one key player Kalshi announced its $300M Series D round, jointly led by a16z and Sequoia, with participation from Paradigm, Coinbase Ventures, General Catalyst, Spark Capital, and CapitalG. The company’s valuation has now reached $5 billion.
What’s remarkable is that Kalshi had just completed its $185 million Series C round in June, with a $2 billion valuation — meaning its valuation jumped by $3 billion in just four months.
In the blog post, Kalshi said this new funding will pave the way for global expansion, aiming to create a unified liquidity pool for prediction markets, effectively building a truly global prediction exchange.
The Kalshi Global Exchange connects traders around the world to the same set of events, deepening market liquidity and price discovery. It now supports users from over 140 countries.
In her earlier essay, Freda Duan noted that Prediction Markets are evolving into a “tradable truth layer / Knowledge Market of the World” — blurring the boundary between information and assets:
Information is no longer just read; it is priced, traded, and settled.
Kalshi stated that prediction markets have matured from a niche experiment into a legitimate financial asset class. All financial markets — equities, bonds, commodities — move based on real-world events. But only prediction markets allow people to trade directly on those events. This fundamental shift could make them one of the world’s largest asset classes.
Kalshi’s growth metrics illustrate this transformation. It has become one of the fastest-growing tech companies in the U.S., and the fastest-growing one outside the AI sector.
Over the past year alone, trading volume has surged 200x to $50 billion, while the user base grew 20x. Previously limited to the U.S., Kalshi now accounts for over 60% of global prediction market activity.
a16z Partner Chris Dixon: “Markets as Computers”
Following the investment, Chris Dixon, general partner at a16z, wrote that prediction markets embody a modern form of classical economic theory — particularly Friedrich Hayek’s idea of “the knowledge problem.”
Hayek argued that no central planner can ever possess the dispersed knowledge held by millions of individuals within an economy — a challenge known as the knowledge problem. Much of this knowledge is tacit, unspoken, and embedded in people’s experiences, circumstances, and preferences.
Hayek didn’t just highlight the limits of central planning; he also proposed a solution. In his 1945 essay “The Use of Knowledge in Society,” he argued that we must look outward, not inward:
“We need decentralization.”
For Hayek, markets are not just mechanisms for resource allocation — they are information systems. Prices act as signals, compressing vast amounts of local knowledge into actionable information. They also create incentives: encouraging people to make decisions, take actions, and feed information back into the system — forming an iterative feedback loop that drives progress.
Today, we might say the solution to the knowledge problem isn’t giving central planners more powerful computers — it’s realizing that the market itself is the computer.
Prediction markets operationalize this concept, applying it to questions about the future and transforming collective knowledge into probabilistic prices.
Why a16z Invested in Kalshi
This is why a16z is so excited about prediction markets — and why they invested in Kalshi. Kalshi is bringing prediction markets into the mainstream through a compliant, scalable event contract platform that spans elections, economics, sports, and culture. It has already processed billions in trading volume and continues to grow rapidly.
Kalshi also plans deep crypto integration, and a16z is thrilled to support the company’s expansion to 140 countries worldwide.
Prediction markets’ potential goes beyond speculation.
For businesses and investors, event contracts provide tools to hedge risks tied to economic or policy shifts.
For policymakers and analysts, market prices offer real-time forecasts often superior to polls or expert opinions.
For society, prediction markets offer a transparent, incentive-aligned way to aggregate views about the future.
Now is the golden moment for prediction markets. As public trust in traditional institutions hits historic lows, we need new systems that can earn trust in different ways — through openness and decentralization.
DeFi offers an alternative to traditional finance.
Stablecoins offer an alternative to legacy payment systems.
Prediction markets offer an alternative to expert forecasting.
Where people once trusted banks or authorities, they can now trust protocols and markets.
Hayek’s insight was that knowledge is too widely distributed for any single authority to hold. Instead, we need systems that can harness collective intelligence. Kalshi embodies this vision — transforming distributed knowledge into market-based predictions. a16z supports Kalshi because it is bringing this concept to the mainstream.
A new Scale AI challenger hit $9M ARR in one year, founded by an 18-year-old girl
Meanwhile, in the AI data labeling space, several companies like Scale AI and Surge have become category leaders.
But as AI continues to evolve, new opportunities keep emerging — with startups like Mercor and Micro1 approaching the problem from recruiting angles.
Now, another data labeling startup has reached nearly $9M ARR in just one year, using a radically different model for data collection.
