Kalshi and Polymarket CEOs Join $35 Million Fund Targeting Prediction‑Market Start‑ups
By [Your Name] – March 23 2026
A new venture vehicle focused exclusively on the emerging prediction‑market ecosystem has secured backing from some of the sector’s most prominent founders and investors. The fund—dubbed 5c(c) Capital—aims to raise up to $35 million to back roughly twenty early‑stage companies over the next two years.
Who is behind the fund?
The initiative is being spearheaded by two former Kalshi employees:
- Adhi Rajaprabhakaran, who served as the second trader at Kalshi’s affiliated market‑making arm, and
- Noah Zingler‑Sternig, previously Kalshi’s head of operations.
The fund’s name references Section 5c(c) of the Commodity Exchange Act, the provision that gives the Commodity Futures Trading Commission (CFTC) authority over event contracts traded on designated markets—a nod to the regulatory framework that underpins the industry.
High‑profile backers
High‑visibility participation comes from the CEOs of the two leading prediction‑market platforms:
- Tarek Mansour, chief executive of Kalshi, and
- Shayne Coplan, chief executive of Polymarket.
Both firms are currently locked in a public valuation competition that has drawn considerable market attention. Their joint investment signals a willingness to foster broader infrastructure that could benefit the entire space, even as they vie for market share.
Additional capital commitments have been lodged by:
- Marc Andreessen (via Moneta Luna)
- Micky Malka, founder of Ribbit Capital
- Kyle Samani, former managing partner at Multicoin Capital
According to Bloomberg, the emerging limited partnership already counts more than twenty institutional and strategic investors.
Market context
Prediction markets have experienced a rapid escalation in valuation over the past twelve months. Kalshi closed a $1 billion financing round at a $22 billion post‑money valuation, effectively doubling its worth from the previous November. Polymarket, meanwhile, is reportedly eyeing a comparable valuation in the vicinity of $20 billion, per recent Wall Street Journal reporting.
The surge reflects both growing institutional interest in event‑based derivatives and the broader integration of decentralized finance (DeFi) mechanisms that enable more open, programmable markets.
What the fund plans to do
5c(c) Capital intends to allocate capital across the infrastructure layer of prediction markets, including:
- Market‑making platforms that provide liquidity for event contracts
- Providers of prediction‑market indices and benchmarks
- Other foundational services that facilitate the creation, settlement, and reporting of outcomes
By concentrating on these “building‑block” businesses, the fund hopes to accelerate the maturation of the sector and create a more cohesive ecosystem for end‑user platforms like Kalshi and Polymarket.
Analysis
-
First dedicated VC vehicle – While venture capital has previously flowed into prediction‑market platforms, this appears to be the first fund expressly targeting the niche’s infrastructure providers. It could set a precedent for sector‑specific capital allocation.
-
Rivalry‑turned‑collaboration – The simultaneous involvement of Kalshi’s and Polymarket’s CEOs may temper competitive tensions by aligning interests around shared standards and liquidity solutions, potentially raising the overall market’s credibility with regulators.
-
Regulatory relevance – Naming the fund after the CFTC’s Section 5c(c) underscores a proactive stance toward compliance. As the CFTC continues to clarify its oversight of event contracts, early‑stage firms with a regulatory‑savvy backer may enjoy a competitive edge.
- Capital influx timing – The fund’s launch coincides with a period of heightened fundraising activity in the prediction‑market space, suggesting that investors view the sector as a high‑growth frontier within broader DeFi and crypto markets.
Key takeaways
- 5c(c) Capital seeks to raise $35 million to invest in about 20 prediction‑market infrastructure startups over the next two years.
- The venture is led by ex‑Kalshi personnel Adhi Rajaprabhakaran and Noah Zingler‑Sternig, and features backing from Kalshi CEO Tarek Mansour, Polymarket CEO Shayne Coplan, Marc Andreessen, Micky Malka, and Kyle Samani, among others.
- The fund’s focus on market makers, index providers, and other core services could speed up the development of a more robust, regulated prediction‑market ecosystem.
- Its emergence reflects the rapid valuation growth of major platforms—Kalshi at $22 billion and Polymarket targeting roughly $20 billion—and signals increasing institutional confidence in the sector.
As prediction markets continue to intersect with DeFi, traditional finance, and regulatory bodies, 5c(c) Capital may become a pivotal catalyst for the next wave of innovation.
This story was produced with AI‑assisted workflows and subsequently edited, fact‑checked, and approved by our editorial team.
Source: https://thedefiant.io/news/tradfi-and-fintech/kalshi-and-polymarket-ceos-back-usd35m-prediction-market-venture-fund
