Kalshi CEO Tarek Mansour went on CNBC’s Squawk Box after closing a $185 million fundraising round that valued the company at $2 billion.
What did he say? Here are the most interesting soundbites from the interview, which you can see below:
Kalshi’s metrics
“Kalshi is one of the fastest-growing companies in America. We 50x’d our user base in the last year. Our volume has grown around 100x. And the number of markets … the operation has scaled 15x just from last October. … Our revenue has scaled meaningfully and the company is doing very, very well on the financial side.”
It’s interesting that we got some fairly concrete growth metrics on the non-revenue side, but a more vague sense of the growth of actual revenue. It would, of course, be difficult to see all those increases and not see some meaningful revenue uplift.
These numbers are almost entirely because of the expansion into elections and sports. Election betting came on the heels of a court victory last fall; sports betting launched in January. Without sports, we probably wouldn’t be talking about another raise at this point, or the lofty valuation.
What Kalshi will do with the new money
“The increased funding is going to three things. One, we have built an incredible talent density in New York, in the city. We're looking to expand that. Number two, we're going to new market structures and scaling the number of markets. So we've gone from around 100 markets in October to 1500 today. And you know we're looking to 2 to 3x that till the end of the year. And last is after having proven the model and the success we've had this year, we've seen incredible influx of broker demand. So brokerages looking to integrate on Kalshi, we're expanding staff to basically be able to sustain that.”
The most interesting thing here is “new market structures and scaling the number of markets.” We have heard Mansour and Kalshi say they are looking for ways to expand beyond the current yes/no dynamic; we’ll see how that plays out.
As for more markets, if those new markets are in sports, that would be a no-brainer. If those markets are in things that aren’t in sports, the utility to Kalshi is more suspect. Kalshi constantly adds tons of new markets that almost no one trades on. Even the ones that break through a bit — like the Pope and New York City mayor — are generally smaller than their sports offerings. In recent months, trading volume at Kalshi has routinely been 70-80% sports. Outside of sports and a handful of the most popular non-sports markets, most of those 1,500 markets are driving very little volume.
Kalshi vs. polls
Responding to a question about Kalshi’s performance in the Democratic primary for New York City mayor (lightly edited out extraneous words to make it a bit more readable):
“So a few things, last fall when I came to the show, you had mentioned are markets going to replace the polls. And I've always said, no, they should not replace the polls. And in some ways the markets get stronger with the polls and hopefully the polls get stronger from the market. And, you know, markets don't live in a sort of vacuum. Even financial markets, like how do you price, you know, Apple shares? You have to kind of get information from other places. And that feeds into the marketplace. And in our case the polls are feeding into the marketplace.
So there were a lot of polls that were sort of having Cuomo really kind of up by 40 points at some point. We were never that extreme. We were kind of more in the middle leading into weekend, we started pricing Mamdani up. You know, we started sort of looking at 55-57% Mamdani and coming into the week, you know, Mamdani was in the lead at that point. And there was a lot of volatility.
And so the markets did pretty well, actually. I think they did exactly what they did is sort of they priced the polls. They priced the new developments in real time.”
Lots to unpack here, but overall I was glad to see Mansour with a much more nuanced take on all of this than we usually see from him:
Has Mansour “always said” that markets should not replace polls, and that they help each other? Look, I’ve only been writing about this granularly for the past six months, but I grade this a 2 out of 10 on a truthiness scale. When he is boasting on social media, polls are terrible and it’s a contest about markets outperforming polls. When he is speaking in a more serious setting — or when it’s clear a market didn’t outperform a poll — he is more nuanced about it. Here is a sampling of things he said about polls:
Sigma: “Polls have been failing us. We don’t know who to listen to. If you go to CNN and Fox, you get two different stories.”
Twitter: “The need for truth and accurate data is crucial in today's world. Polls are failing us.”
Prediction News: “The markets sort of learn from the polls, and they learn from a lot of other data points and a lot of other things going on in the wild,” Mansour said. “My expectation for…the coming years of the industry is sort of like [an] entire ecosystem of data being built [and] people can make money out of it.”
So, look, I am sure he has always realized that polls are important, and he knows that the NYC mayor’s race underlines that polls are an important part of the pricing of election markets. But he’s been on the record talking crap about polls vis a vis markets for some time.
I don’t entirely agree with Mansour’s timeline and assessments of the market on the race.
Mansour says Kalshi never priced it as extreme as Andrew Cuomo +40% in the polls. Well, that’s perhaps true, but Cuomo was as much as 90% to win at Kalshi as recently as late May. So, he may be technically right, but that’s also not the whole picture.
Mamdani was not a >50% favorite at any point until Monday morning, when an Emerson College poll came out that favored him to win the primary. He only got there after the poll. Then we started seeing Mamdani and Cuomo flip back and forth in the market as to who was the favorite. I’ve written this several times, but Kalshi priced Mamdani as the winner for a short time precisely because of the poll. And the market had gotten back to Cuomo as favorite when polls closed on Tuesday.
On the flip side, the market was definitely moving toward Mamdani even before the poll! Cuomo was at 67% to win early Monday morning. He had been as high as 77% on Sunday.
Mansour said markets “priced the developments” in real time… I agree! This is absolutely how prediction markets should be approaching the topic.
The fact that Kalshi didn’t predict Mamdani beforehand isn’t a problem in and of itself. It’s only a problem when Kalshi and Polymarket pretend that when a market is >50% and they get it right, they predicted the future. If this is a change in tone from Mansour — and not just a one-off — it’s a breath of fresh air. We’ll see.
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