What to know:
- 5c(c) Capital is raising $35M to back prediction market and event-trading startups.
- Backers include Polymarket, Kalshi, Andreessen, Ribbit, and Kyle Samani.
- Senate scrutiny grew as Polymarket tightened rules on trading abuse and conduct.
A new venture capital firm is reportedly receiving significant funding support as interest in the prediction markets sector continues to grow. This comes as 5c(c) Capital plans to raise $35 million to invest in event-based trading startups.
According to a Fortune report, the venture capital firm 5c(c) Capital has reportedly received support from various notable figures. These are Kalshi CEO Tarek Mansour, Polymarket CEO Shayne Coplan, a16z co-founder Marc Andreessen, Ribbit Capital’s Micky Malka, and former Multicoin Capital managing partner Kyle Samani.
The firm will be headed by two former Kalshi employees. They are Noah Zingler-Sternig, the former head of operations, and Adhi Rajaprabhakaran, a former trader at Kalshi’s affiliated market maker.
Prediction Markets Draw Fresh Funding and Startup Activity
The name “5c(c) Capital” comes from a clause in the Commodity Exchange Act. The clause allows the Commodity Futures Trading Commission to have oversight over event contracts offered by designated contract markets.
This fundraising comes as the prediction markets sector is seeing continued investment. Kalshi has just raised another $1 billion in funding at a valuation of $22 billion, while Polymarket is said to be seeking funding at a similar valuation.
Activity is also rising beyond the biggest platforms. New startups are entering the industry to serve existing operators, while others are seeking to leverage existing betting trends.
There are some startups that are being acquired in the growing industry. At the same time, large companies like Coinbase and DraftKings are seeing prediction platforms as a future growth opportunity.
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However, the legal landscape is still in limbo in the United States, with regulators at the state level opposing prediction markets, while CFTC Chairman Mike Selig has expressed support for properly structured event contracts.
Kalshi, Polymarket Respond as Regulatory Pressure Builds
According to the report, Selig co-authored an amicus brief with Kalshi. In the brief, he supported Kalshi, stating that contracts made through the proper framework come under the jurisdiction of the CFTC.
There was an increase in pressure on the industry again on Monday. The Wall Street Journal reported that a bipartisan Senate effort to bar sports betting on prediction markets is being pushed forward by lawmakers.
There was a rebuttal of the effort by Kalshi CEO Tarek Mansour in a post on X. He claimed that regulated prediction market platforms provide a better product, stating that banning them will simply drive them offshore.
There was a policy update announced by Polymarket on Monday. The platform updated its terms of service as well as its integrity policy, aiming to enhance restrictions related to insider trading and market manipulation.
Also Read: Kalshi and Polymarket Seek New Funding at $20B Valuation
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