The first venture capital fund focused on prediction market startups has been launched. Led by former Kalshi employees, this fund will precisely target the core infrastructure of the rapidly growing "prediction market" industry.
5c(c) Capital was founded by a former Kalshi employee.
According to Fortune magazine, Adi Rajapurapakaran, an early member of Kalshi, and former COO Noah Zingler-Sternick have founded "5c(c) Capital," which is currently raising up to $35 million (approximately 52 billion Korean won). The fund's name is derived from a clause in the U.S. Commodity Exchange Act concerning "event contracts."
The two founders were respectively the second trader and the former head of operations at Kalshi's market maker, and were people who had firsthand experience in predicting market structure from within.
The "co-investment" competition between Kalshi and Polymarket has attracted attention.
In this fund, Kalshi CEO Tarek Mansour and Polymarket CEO Shayne Coplan both participated as investors. It is highly unusual for the two companies, which have been engaged in a multi-billion dollar valuation battle and public competition, to participate in the same fund.
In addition, a16z co-founder Marc Andreessen, Ribbit Capital founder Micky Malka, and former Multicoin Capital partner Kyle Samani are also among the investors. It is understood that the total number of investors exceeds 20.
Concentrated investment in forecasting market infrastructure
5c(c) Capital plans to invest in approximately 20 companies over the next two years. Its primary targets include market makers, prediction market index providers, and other infrastructure companies. Its strategic focus is not simply on platforms, but rather on areas that form the foundation of an ecosystem.
Prediction markets are structures that trade the probability of various events, such as elections, economic indicators, and sporting events. They are growing rapidly recently after being combined with cryptocurrencies.
Soaring valuations…signs of market expansion
The market is also growing rapidly. Kalshi recently raised $1 billion (approximately 1.4885 trillion won) in an investment led by Coatue Management, valuing the company at $22 billion (approximately 32.7 trillion won). This is double the level in November last year.
It is reported that Polymarket is also pursuing a financing round with a valuation target of approximately $20 billion (approximately 29.7 trillion Korean won).
Amidst the growing attention on prediction markets as "next-generation financial infrastructure," the establishment of this fund is interpreted as a signal of accelerated ecosystem expansion. Some analysts believe this signifies that the industry has moved beyond platform competition and entered a phase of infrastructure competition.
🔎 Market Analysis
The prediction market industry is evolving from platform competition to an early stage of infrastructure-centric competition. Not only are major players like Kalshi and Polymarket seeing a surge in investment demand for foundational ecosystem companies, but venture capital is also flowing in.
💡 Strategic Highlights
Compared to simple prediction platforms, investing in "invisible core infrastructure" such as market makers, data providers, and index operators is considered a long-term strategy for gaining market dominance. The fact that CEOs of competing companies participate in the same fund also demonstrates a shared belief in the industry's expansive potential.
📘 Terminology Explanation
Prediction markets: Markets that trade the probability of future event outcomes
Market makers: Key participants providing market liquidity
Event contracts: A form of derivatives whose returns are determined by whether a specific event occurs.
💡 Frequently Asked Questions (FAQ)
Q.
How does market prediction differ from general investing?
Prediction markets do not invest in the value of a company like stocks; instead, they are structures where you bet on the probability of a specific event occurring. For example, you can buy or sell the outcome of various events such as election results or the release of economic indicators.
Q.
Why focus investment on infrastructure companies?
Platform competition is fierce and easily replaced, while infrastructure such as market makers or data providers are crucial to the entire ecosystem and therefore can generate more stable revenue and influence in the long run.
Q.
What are the reasons for the joint investment by Kalshi and Polymarket?
Although the two companies are competitors, their individual value is enhanced only through overall market growth. Investing in shared infrastructure can be interpreted as a strategic move aimed at accelerating industry expansion.
TP AI Precautions
This article uses a language model based on TokenPost.ai for article summarization. The main content may be omitted or may differ from the facts.
