Polymarket is raising a new $1 billion funding round at a reported valuation of $21 billion.
The round is led by 1789 Capital, which includes Donald Trump Jr. among its partners. The round would make 1789 one of Polymarket’s largest backers and put the company just behind rival Kalshi’s $22 billion valuation.
The venture capital firm is expected to invest roughly $300 million in the new round, after previously investing about $200 million in Polymarket, according to the New York Times and Wall Street Journal. The fundraising would value the prediction market at $21 billion, up from roughly $15 billion before the investment.
A $1B round for Polymarket
The reported financing is another sign that major investors still see prediction markets as one of the most valuable emerging categories in financial technology, even as the products face litigation and integrity questions around the country.
Polymarket has not publicly announced the round. But a spokeswoman for 1789 confirmed to the New York Times that the fund is leading the financing.
The investment would expand the relationship between Polymarket and 1789 Capital, which already carries political interest because Trump Jr. is a partner in the firm. Trump Jr. has become a prominent voice in the prediction market ecosystem, and the new investment would increase 1789’s total Polymarket commitment to around $500 million.
Kalshi still holds valuation lead
The reported $21 billion Polymarket valuation would put it close to Kalshi, which raised a $1 billion Series F at a $22 billion valuation in May. Coatue led that financing, with Sequoia Capital, Andreessen Horowitz, IVP, Paradigm, Morgan Stanley and ARK Invest also participating.
Kalshi’s May round doubled its valuation from the $11 billion it reached only five months earlier. The competing valuations show just how quickly capital has flowed into prediction markets.
The gap between the two is now thin enough that the next financing, legal ruling or major distribution deal could determine which platform is considered the sector’s leading private company.
Trading volume keeps climbing
Investor appetite follows a dramatic increase in prediction-market trading. Kalshi and Polymarket have $12.1 billion in weekly notional trading volume, according to DeFi Rate.
More broadly, monthly prediction-market volume grew from about $1.2 billion in early 2025 to more than $20 billion by January 2026, according to TRM Labs. Polymarket alone set a then-record $425 million in daily volume on Feb. 28.
Sports remains a major driver. Since July 2024, sports has represented about 80% of Kalshi’s total volume and 39% of Polymarket’s.
Legal fights remain
The investment arrives while the legal future of prediction markets remains unsettled. Kalshi is embroiled in state-by-state litigation over whether sports event contracts are federally regulated derivatives or unlicensed sports betting. The Ninth Circuit recently ruled for Nevada, finding Kalshi’s sports contracts were likely sports bets rather than swaps, while the Third Circuit previously sided with Kalshi in New Jersey.
That circuit split has made a Supreme Court fight increasingly likely, especially as states such as New York, Connecticut, Utah and Michigan continue pressing enforcement cases. The Commodity Futures Trading Commission has argued it has exclusive federal authority over qualifying event contracts. At the same time, state gaming regulators say the products are simply sports betting offered without a state license.
Polymarket faces a different but related set of pressures. The company has faced scrutiny over alleged deceptive social media marketing and potential insider trading tied to sensitive military information. Polymarket says it has referred more than 90 accounts to law enforcement and cooperates with relevant investigations.
Integrity remains a test
Both platforms have spent 2026 promoting stronger internal monitoring as political, sports and military-related markets have drawn attention.
Polymarket’s integrity policy states that it prohibits trading on material nonpublic information and that it has referred suspicious accounts to law enforcement.
That work may matter as much as the valuation. A $21 billion price tag shows investors believe prediction markets can become a major consumer-finance and information product. The legal and integrity questions will determine whether they can sustain that growth without being forced into the same state-by-state licensing framework as sportsbooks.
