Markets
Peter Thiel Founders Fund Vitalik Buterin Backs $45 Million Investment in Polymarket
Polymarket, the cryptocurrency-based prediction market platform enjoying a breakout year in the run-up to the US presidential election, has raised $45 million in a Series B funding round with a roster of large investors.
Billionaire Peter Thiel’s Founders Fund is the lead investor, Polymarket founder Shayne Coplan told CoinDesk via Telegram message. Other participants include Ethereum creator Vitalik Buterin, 1confirmation, ParaFi and Dragonfly Capital, Coplan said. He did not disclose the value of the company in the transaction.
The round follows a previously undisclosed $25 million Series A led by General Catalyst, Coplan said. Factoring in $4 million round seed in 2020, Polymarket raised well over $70 million.
The company said it has also hired Richard Jaycobs as head of market expansion to prepare for the next phase of growth. Jaycobs has previously served as an executive of trading companies, including president of the Cantor Exchange and chief executive officer of The Clearing Corporation.
Polymarket is the most successful attempt to build prediction markets on crypto infrastructure. In prediction markets, traders bet money on verifiable outcomes of real-world events over a specified time frame. These events range from sports matches TO celebrity engagements TO nuclear weapons.
For example, a to contract on Polymarket asks if the U.S. Securities and Exchange Commission will approve an Ethereum ether exchange-traded fund (ETH) by May 31st. “Yes” shares recently traded at 16 cents, indicating the market sees a 16% chance of that happening. Each stock pays $1 if the prediction comes true and zero otherwise.
More than just gambling, these markets create good things spillover effects providing more accurate readings of public sentiment and more reliable forecasts than polls and pundits, advocates such as economist Robin Hanson have long supported.
Late last year, analysts at Bitwise Investments valued that a record $100 million would be bet on cryptocurrency-based prediction markets (of which Polymarket is by far the largest) in 2024. A single contract on Polymarket has already surpassed that estimate.
Polymarket has one big disadvantage: it is excluded from the United States, the largest economy in the world. Under a 2022 settlement with the Commodity Futures Trading Commission, he is prohibited from doing business with U.S. residents. This left the field open for Kalshi, the only prediction market platform regulated by the CFTC (which regulates betting in dollars rather than cryptocurrencies).
However, the imprimatur is a double-edged sword. The CFTC has cracked down on what it calls “event contracts”; last week proposed a ban on election-related bets, which would hit Kalshi and PredictIt (which operates in the US under a no-action letter, or regulatory exemption), but not the already banned Polymarket.