Essential Insights
- Former Kalshi employees are raising up to $35 million with 5c(c) Capital to invest in prediction market infrastructure startups, focusing on market makers, indices, and tooling.
- The fund is backed by industry leaders including Kalshi and Polymarket CEOs, as well as top venture firms like Andreessen Horowitz, Ribbit Capital, and Multicoin Capital.
- Prediction markets have shifted from niche speculation to critical financial infrastructure, with billions in monthly trading volume on platforms like Kalshi and Polymarket.
- 5c(c) Capital aims to support around 20 companies over two years, betting on prediction markets evolving into an exchange-like ecosystem of specialized infrastructure.
Two former employees of Kalshi are launching a new investment fund called 5c(c) Capital. They aim to raise up to $35 million to support startups that build prediction market tools. This fund is backed by Kalshi CEO Tarek Mansour, Polymarket CEO Shayne Coplan, and major venture firms. The team plans to make about 20 investments over the next two years. They will focus on companies that improve market making, index creation, and core infrastructure for event-based trading.
This move comes as prediction markets grow in popularity. These platforms now see billions of dollars in monthly trading volume. For example, Kalshi processed nearly $10 billion in February, while Polymarket traded about $7.6 billion. Together, the prediction sector reached over $23 billion in activity. Traders often use these markets to hedge risks or speculate on crypto assets in very short time frames, such as five-minute contracts. This mixing of trading, gambling, and hedging shows how important prediction markets are becoming to finance and technology.
The new fund highlights how prediction markets are shifting from a niche activity to mainstream financial infrastructure. Instead of focusing just on consumer apps, 5c(c) Capital is supporting the technology that runs these markets. The goal is to create a layered exchange system with cities, indices, and tools that boost market liquidity and risk management. If the fund hits its $35 million target, each investment will likely be in the mid-single-digit millions. This can help develop more advanced trading systems and products, shaping the future of event-driven finance.
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