Author: Fortune
Compiled by Deep潮 TechFlow
Shenchao Summary: Two competing prediction market CEOs appear on the same LP list. The fund, named 5c (c) Capital, was founded by two early Kalshi employees and aims to raise $35 million exclusively for investing in prediction market infrastructure. Investors include Marc Andreessen, the founder of Ribbit Capital, and the former managing partner of Multicoin Capital—signaling that the prediction market space is transitioning from product competition to ecosystem building.
The full text is as follows:
The CEOs of Kalshi and Polymarket are fiercely competing to dominate the hot prediction markets sector. But on at least one front, they’ve put aside their rivalry, each investing in a new venture fund founded by two former early employees of Kalshi. According to a fundraising document seen by Fortune, the fund, named 5c (c) Capital, is raising up to $35 million to invest in prediction market startups.
The name of this new venture capital fund is derived from a provision in federal legislation regulating commodities and derivatives, a category into which prediction markets are now included. The fund’s partners are Adhi Rajaprabhakaran—the second trader hired by Kalshi’s affiliated market maker—and Noah Zingler-Sternig, former head of operations at Kalshi.
In addition to Kalshi CEO Tarek Mansour and Polymarket CEO Shayne Coplan, the document shows that early supporters of the fund also include a group of prominent venture capitalists: venture capital giant Marc Andreessen participated through his fund Moneta Luna; Micky Malka, founder of fintech investment firm Ribbit Capital; and Kyle Samani, former managing partner at crypto VC Multicoin Capital.
Rajaprabhakaran, one of the founding partners of 5c (c) Capital, declined to comment. A spokesperson for Andreessen Horowitz also declined to comment. Polymarket and Malka did not immediately respond to requests for comment.
A Kalshi spokesperson confirmed Mansour's involvement. "Adhi understands that the coming years are critical for building the infrastructure around prediction markets," Samani stated in a statement, confirming his support for 5c (c) Capital.
Predictive market boom
The fundraising efforts by these two early Kalshi employees coincide with prediction markets becoming one of Silicon Valley’s hottest sectors. Kalshi is raising $1 billion at a $22 billion valuation, led by seasoned Silicon Valley investor Coatue Management. Its competitor, Polymarket, is also seeking a similar valuation of approximately $20 billion. Both platforms allow users to place bets on a wide range of topics, from the price movements of Bitcoin or Ethereum to the winner of the NCAA basketball tournament.
Amid rising investment enthusiasm, state governments are also attempting to curb the rise of prediction markets, particularly after Kalshi and Polymarket opened their platforms to sports markets. Regulators view these two prediction markets as sports betting venues that must comply with strict state laws. Kalshi is currently facing approximately 20 federal lawsuits challenging its legality. Last week, the Attorney General of Arizona also brought criminal charges against the startup.
Kalshi and Polymarket, which has not yet launched on U.S. platforms, both argue that prediction markets are fundamentally different from sports betting, and that federal regulator CFTC has authority over prediction markets that supersedes state powers.
Despite the challenging legal landscape, 5c (c) Capital’s fundraising materials still describe prediction markets as "an investment opportunity for a generation." The two partners plan to invest in approximately 20 companies over the next two years, including categories such as prediction market market makers and prediction market index designers.
The venture fund will complete its first close within one month.
"Adhi is a talented investor, and we are thrilled to support him," said Elena Silenok, founder and managing partner of Moneta Luna, Marc Andreessen’s investment vehicle.