In a surprising move, executives from competing firms unite to support a new VC fund amid their ongoing competition in the prediction market sector.
The CEOs of Kalshi and Polymarket, fierce competitors in the prediction market industry, are both investing in a new $35 million venture capital fund called 5(c) Capital, as reported by TechCrunch. This development highlights unusual collaboration in a sector marked by intense rivalry.
5(c) Capital, named after a regulatory clause related to prediction markets, is being led by Adhi Rajaprabhakaran, a Kalshi trader, and Noah Zingler-Sternig, formerly Kalshi's head of operations. The fund aims to invest in about 20 companies that support the infrastructure of prediction markets, such as market makers and index designers.
Key Investors and Fund Focus
Other notable investors in 5(c) Capital include Marc Andreessen through his fund Moneta Luna and Micky Malka of Ribbit Capital. Kalshi CEO Tarek Mansour confirmed his investment, while Polymarket CEO Shayne Coplan's involvement was noted in reports, though Polymarket did not respond to inquiries.
The fund's investment memo outlines a strategy to capitalize on the growth of prediction markets by backing founders who target secondary and further effects in the sector. This approach seeks to build out the ecosystem beyond the core platforms.
Meanwhile, Kalshi is actively raising $1 billion at a $22 billion valuation, up from its previous $11 billion valuation, according to The Wall Street Journal. Polymarket is in discussions for a funding round that could value it at $20 billion, indicating rapid expansion in the industry.
This investment by rival CEOs underscores the maturing prediction market space, where competition coexists with opportunities for shared infrastructure development, as per the source.
