Kalshi and Polymarket back $35 million fund as prediction markets boom despite regulatory pressure

Two early Kalshi employees are raising up to $35 million for 5c(c) Capital, a fund aimed at backing startups building around prediction markets, according to a Fortune report.

The fund has already attracted support from an unusual mix of competitors and top investors. Backers include Kalshi CEO Tarek Mansour and Polymarket CEO Shayne Coplan, alongside venture heavyweights such as Marc Andreessen through Moneta Luna, Ribbit Capital founder Micky Malka, and former Multicoin managing partner Kyle Samani.

5c(c) Capital is led by Adhi Rajaprabhakaran, an early trader tied to Kalshi’s market making operations, and Noah Zingler Sternig, the company’s former head of operations. The name references a clause tied to the federal regulation of commodities and derivatives, a category that now includes prediction markets.

The fund plans to invest in roughly 20 companies over the next two years, targeting areas such as market making, prediction market indices, and broader infrastructure. Its first close is expected within the next month.

The launch comes as prediction markets emerge as one of the most talked-about sectors in Silicon Valley. Kalshi is reportedly raising $1 billion at a $22 billion valuation, while Polymarket is targeting a valuation near $20 billion, highlighting the scale of investor demand for platforms that allow users to trade on real-world outcomes.

These platforms enable users to take positions on everything from crypto price movements to major global events, blending elements of finance, forecasting, and speculation into a single market structure.

At the same time, the sector is facing growing pressure from regulators. State authorities have raised concerns that prediction markets resemble sports betting platforms and should follow the same rules, while companies argue they fall under federal oversight as regulated financial products.