According to rumors, prediction market giants Polymarket and Kalshi are considering new funding that would put the companies' respective valuations at $9 billion and $5 billion, significantly above the most current estimates.

Among the investors in polymarkets are Vitalik Buterin, a co-founder of Ethereum, Donald Trump Jr., and Peter Thiel's Founders Fund. In August, Trump Jr.'s 1789 Capital firm invested a multimillion-dollar, double-digit sum in Polymarket. He holds advisory positions at Polymarket and Kalshi.

"Polymarket has considered an offer that would value the company as much as $9 billion, according to people who have spoken to the company’s leaders,” The Information reported. “That would be a huge jump in price for the startup, which raised money at a $1 billion valuation earlier this summer.”

At least one unnamed investor made an offer for a share in Polymarket, valuing the company at $10 billion, according to sources who spoke to another media under the condition of anonymity.

Kalshi, Quickly Increasing Polymarket Values

The multiples that investors are ready to place on the derivatives exchanges have increased dramatically in a matter of months, assuming that the rumors that Kalshi and Polymarket may be worth $5 billion and $9 billion are true.

The company was valued at $2 billion after Kalshi closed a $185 million Series C investment round in June. Polymarket finished raising funding at a $1 billion valuation around the same period. In other words, in just ninety days, Kalshi's value has more than doubled. It seems that Polymarket's valuation floor has increased to $3 billion, indicating that it has tripled in a matter of months.

Polymarket and Kalshi would be worth more than Rush Street Interactive (NYSE: RSI), a pure-play iGaming/sports betting company with a market valuation of $4.83 billion as of September 12, at $9 billion and $5 billion, respectively.

Kalshi and Polymarket might also be worth as much as or more than other well-known interactive gaming companies that are divisions of bigger omni-channel gaming companies at those reported price points.

Investors Are Interested in Forecasting Markets

Private market investors are clearly showing interest in prediction markets operators, which are businesses that are increasingly at odds with the sports betting sector, just as they were in the early days of the internet sports betting boom. The confluence of prediction markets and cryptocurrencies, which regulated sportsbooks lack, is largely responsible for that ebullience.

In order to open the door for more extensive use cases, certain yes/no derivatives exchanges are either fully crypto-based or, at the very least, let customers fund accounts in specific digital currencies.

According to The Block, the total amount raised so far this year—$216 million across 11 deals—is more than double that of last year and more than quadruple that of 2021, making it the biggest prediction market fundraising year ever.