Two former Kalshi employees have launched 5c(c) Capital, a $35 million venture fund that will invest exclusively in prediction market startups, backed by the CEOs of both Kalshi and Polymarket, the two largest and most bitter rivals in the space. The fund, which was announced on March 23, 2026, is the first venture vehicle dedicated entirely to the prediction market industry.
- 5c(c) Capital plans to invest $35 million in approximately 20 early-stage prediction market startups over two years, with its first close expected by late April 2026.
- Kalshi CEO Tarek Mansour and Polymarket CEO Shayne Coplan are both backing the fund despite running competing platforms worth a combined $44 billion in valuation.
- Marc Andreessen, Ribbit Capital founder Micky Malka, and former Multicoin Capital managing partner Kyle Samani are among the fund’s more than 20 early investors.
Details of the 5c(c) Capital Fund
The fund will target data tools, liquidity provision services, and compliance systems that support prediction market exchanges, rather than building competing platforms. Founding partners Adhi Rajaprabhakaran, the second trader hired at Kalshi’s affiliated market maker, and Noah Zingler-Sternig, Kalshi’s former head of operations, described the fund’s thesis in a pitch document shared with Fortune: prediction markets represent a “generational investment opportunity.”
A prediction market is a regulated exchange where participants buy and sell contracts tied to the outcomes of real-world events, from elections and economic indicators to sports and cultural moments. 5c(c) Capital is named after Section 5c of the Commodity Exchange Act, the legal provision that governs these markets.
The fund has attracted more than 20 backers so far. In addition to the Kalshi and Polymarket CEOs, investors include Marc Andreessen through his Moneta Luna fund, Ribbit Capital founder Micky Malka, former Multicoin Capital managing partner Kyle Samani, a portfolio manager from Millennium Management, and several crypto-focused venture capital firms, according to Bloomberg.
Background on the Prediction Market Boom
The fund arrives at a moment of explosive growth for prediction markets. Kalshi raised over $1 billion in new funding in March 2026 at a $22 billion valuation, doubling its value from December, according to Bloomberg. The platform’s monthly trading volume exceeded $10 billion in February, a 12x increase in just six months, and its annualized revenue reached $1.5 billion.
Polymarket, Kalshi’s primary competitor, is eyeing a similar valuation near $20 billion. Major financial platforms including Coinbase, Kraken, and Robinhood have recently entered the prediction market space, offering contracts tied to politics, economics, and cultural events. The sector’s surge followed massive public interest during the 2024 U.S. presidential election, when prediction markets gained mainstream visibility as a new form of alternative finance.
What This Means for the Startup Ecosystem
The launch of a dedicated VC fund signals that prediction markets have matured from a niche corner of fintech into a full ecosystem requiring specialized infrastructure. Kyle Samani told Fortune: “Adhi knows that the next few years are critical to build out infra around prediction markets.”
For founders, the fund opens a new category of investable startups. Companies building data analytics for prediction outcomes, market-making algorithms, regulatory compliance tools, and cross-platform settlement layers now have a purpose-built funding source. The fact that rival CEOs are co-investing suggests both believe the total addressable market is large enough that growing the ecosystem benefits all players.
The prediction market industry does face headwinds. The Ninth Circuit Court of Appeals recently denied Kalshi’s attempt to block a temporary restraining order from Nevada, and Arizona charged Kalshi with 20 criminal counts, accusing it of operating an illegal gambling business. How regulators define the line between financial exchange and gambling could shape which types of prediction market startups attract future capital.
Frequently Asked Questions
What Is 5c(c) Capital and Who Founded It?
5c(c) Capital is the first venture fund dedicated to prediction market startups. It was founded by Adhi Rajaprabhakaran, a former Kalshi market maker trader, and Noah Zingler-Sternig, Kalshi’s former head of operations.
How Much Is the Prediction Market VC Fund Raising?
5c(c) Capital is raising up to $35 million and plans to invest in approximately 20 early-stage startups over two years. The fund expects its first close within one month of its March 2026 announcement.
Why Are Kalshi and Polymarket CEOs Investing in the Same Fund?
Despite being direct competitors, Kalshi CEO Tarek Mansour and Polymarket CEO Shayne Coplan both invested in 5c(c) Capital because both see prediction market infrastructure as a growth opportunity that benefits the entire industry.
