The battle for dominance in prediction markets is notoriously fierce, but a new venture fund has managed to bring the industry’s biggest rivals to the same table. Tarek Mansour, CEO of Kalshi, and Shayne Coplan, CEO of Polymarket, are both backing 5(c) Capital, a $35 million firm dedicated to the next generation of market infrastructure.
A Strategic Alliance in a Competitive Field
While Kalshi and Polymarket continue to fight for users and volume, their respective leaders recognize that the entire sector needs a robust supporting ecosystem to thrive. 5(c) Capital—named after the specific regulatory clause governing prediction markets—is led by two former Kalshi insiders: Adhi Rajaprabhakaran and Noah Zingler-Sternig.
The fund has attracted heavy hitters beyond the rival CEOs. Notable investors include Marc Andreessen, participating through the fund Moneta Luna, and Ribbit Capital founder Micky Malka. This concentration of capital suggests a shared belief that prediction markets are moving past their infancy and into a more mature, institutional phase.
Investing in the Ripple Effects
Rather than backing new consumer-facing platforms, 5(c) Capital plans to invest in approximately 20 companies that handle the “second-, third-, and fourth-order effects” of the industry. The investment strategy focuses on:
- Infrastructure: Technical tools that enable markets to scale securely.
- Market Makers: Firms providing the liquidity necessary for efficient trading.
- Index Designers: Creators of the benchmarks and data points that markets settle against.
The Multi-Billion Dollar Stakes
The launch of this fund comes as both primary platforms see their valuations skyrocket. Kalshi is currently seeking $1 billion in new funding at a $22 billion valuation, effectively doubling its price tag in less than four months. Meanwhile, Polymarket is in discussions for its own round that could value the company at $20 billion.
Despite the looming threat of bipartisan legislation targeting certain types of betting, these massive valuations signal that the industry’s architects are doubling down on the future of forecasting. The results of these investments will likely be a major topic at upcoming industry gatherings, including TechCrunch Disrupt 2026 and the TechCrunch Founder Summit.
