There are few competitions in the startup ecosystem as intense (and sometimes cutthroat) as the competition between Polymarket and Kalshi for dominance in the rapidly growing predictive market space.
Despite the intense competition, the CEOs of both companies are investing in 5(c) Capital, a new VC firm specializing in prediction markets started by former Kalsi employees, Fortune and Bloomberg reported.
5(c) Capital, whose name refers to the regulatory provisions governing prediction markets, has raised $35 million for its first fund. In addition to Karsi CEO Tarek Mansour and Polymarket CEO Shayne Koplan, the fund's notable investors reportedly include Marc Andreessen, who previously worked with Moneta Luna through his investment in the fund, and Rivit Capital founder Micky Malka.
Mr. Kalsi confirmed that Mr. Mansour invested in the fund. Polymarket did not respond to a request for comment.
5(c) Capital reportedly said in an investment memo that it seeks to support founders who “want to take advantage of second-, third-, and fourth-order effects” of the rapidly growing prediction market. The fund will invest in around 20 companies, focusing on this category of infrastructure, including market makers and index designers.
The new fund will be led by partners Adi Rajaprabhakaran, a Kalsi trader hired by the firm, and Noah Zinler Sternig, a former Kalsi operations chief.
Meanwhile, Kalsi has raised $1 billion at a $22 billion valuation, doubling the $11 billion valuation it achieved less than four months ago, while rival Polymarket is reportedly in talks with investors for a new round that would value the platform at $20 billion, according to the Wall Street Journal.
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