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Kalshi DERIVATIVES MARKET Farmer sells futures contract 1,000 BUSHELS @$3 = $30,000 @$5 = $50,000 @$7 = $70,000 Kellogg's BUYS MARKET BUYS: EVENT CONTRACT UNDER $5: 40% ODDS OVER $5: 60% ODDS Q1 2026 The Setter 30 Rank Issuer Business Activity 1. Anthropic Frontier AI Lab 2. SpaceX Space, Connectivity, and Frontier AI Lab 3. Anduril Defense Tech 4. Stripe Payment Platform 5. OpenAI Frontier AI Lab 6. Databricks Data Analytics Platform 7. Polymarket Crypto Prediction Market 8. Revolut Neobank and Payments Platform 9. ElevenLabs AI Voice Generator & Agents Platform 10. Neuralink Brain-Computer Interface Company 11. Kalshi Prediction Market and Event-Contract Platform 12. ByteDance Social Media Platform 13. Shield AI Defense Autonomy Software 14. Cursor (Anysphere) AI Software Development Platform 15. Ramp Corporate Spend and Expense Management 16. Canva Online Graphic Design Platform 17. Replit AI Software Creation Platform 18. OpenEvidence Clinical AI Assistant 19. Crusoe Energy AI Data Center Operator 20. The Boring Company Tunneling Infrastructure 21. Saronix Autonomous Naval Defense 22. Cerebras AI and Computer Hardware 23. Figure AI Humanoid Robotics Company 24. Deel Global Payroll and HR Platform 25. Kraken Cryptocurrency Exchange and Services 26. Lovable AI Application Development Platform 27. Apptronik Humanoid Robotics Company 28. Perplexity AI Search Engine 29. Lambda AI Hardware and Cloud Solutions Company 30. Harvey Legal AI Platform This is part six in our Charts & Crafts series on the most valuable private tech companies. Luana, a Brazilian professional ballerina, and Tarek, a Lebanese American math whiz, crossed paths at MIT. An internship at Bridgewater for her, one at Goldman for him. They interned together at Citadel and then decided to join forces to build Kalshi, the first regulated prediction market in 2018. To understand the business, you need to first understand America's weird history with betting. Betting in the US used to be illegal. In 2018, the Supreme Court changed that, specifically for sports. Americans now bet $100 billion a year on sports. But for other things like election, interest rates, the weather, no legal market existed. Weirdly though, a huge parallel market did exist on Wall Street, the derivatives market. It works like this: Say a corn farmer in Iowa has 10,000 bushels of corn worth $50,000 today, but in six months prices could drop to $3—he'd lose $20,000. Meanwhile, Kellogg's, the buyer, is worried prices of corn go up to $7 instead, so he sells a futures contract for $5 today, which they buy happily. Both sides hedge risk, completely legal, federally regulated. Kalshi brings that same model to everyone. Take a family-run tortilla maker in Texas. Corn is their biggest cost, it's too small for the derivatives market, so they buy a Kalshi event contract instead, where they bet that the price of corn will spike. If they're right, the contract pays out and cushions the financial blow. Similar mechanism, but a whole new market. While their biggest competitor, Polymarket, went offshore and on crypto, Kalshi spent two full years during the pandemic asking for federal permission. Tarek was actually in Beirut during the port explosion when it killed 200 people. During the day, he pulled people from rubble, at night he wrote federal filings. In November 2020, they became the first federally regulated prediction market in US history, letting people trade on everything from the Fed rate to the Oscars to hurricanes. Election betting is the big prize, but the government kind of stiff-armed them on it, so Luana sued the regulators. In September 2024, they won right before the US presidential election, when it went live. They did over a billion dollars in transactions on that event alone. The growth after that is a hockey stick. Slow growing until 2024, then from $2 billion to $24.2 billion last year and still accelerating. Winning in federal court didn't end the fight. It started new ones in many states. Nevada, Ohio, and Arizona all suing. Beyond the court, critics also worry that letting people profit from elections can create dangerous incentives. Investors bet on it anyway. $2.6 billion raised at a $22 billion dollar valuation just this month. $1.2 billion in annualized revenue. Luana is now the youngest self-made female billionaire in the world at age 29. But the company she and Tarek built is still fighting in court whether it should even exist. Which company should we cover next?

Transcript

The Kalshi story has everything. A billionaire ballerina, two immigrants from MIT, multiple court cases, a big bet on Donald Trump's election. This is part six in our Charts & Crafts series on the most valuable private tech companies. Let's dive in. The two founders are out of a movie. Luana, a Brazilian professional ballerina, and Tarek, a Lebanese American math whiz, crossed paths at MIT. An internship at Bridgewater for her, one at Goldman for him. They interned together at Citadel and then decided to join forces to build Kalshi, the first regulated prediction market in 2018. To understand the business, you need to first understand America's weird history with betting. Betting in the US used to be illegal. In 2018, the Supreme Court changed that, specifically for sports. Americans now bet $100 billion a year on sports. But for other things like election, interest rates, the weather, no legal market existed. Weirdly though, a huge parallel market did exist on Wall Street, the derivatives market. It works like this: Say a corn farmer in Iowa has 10,000 bushels of corn worth $50,000 today, but in six months prices could drop to $3—he'd lose $20,000. Meanwhile, Kellogg's, the buyer, is worried prices of corn go up to $7 instead, so he sells a futures contract for $5 today, which they buy happily. Both sides hedge risk, completely legal, federally regulated. Kalshi brings that same model to everyone. Take a family-run tortilla maker in Texas. Corn is their biggest cost, it's too small for the derivatives market, so they buy a Kalshi event contract instead, where they bet that the price of corn will spike. If they're right, the contract pays out and cushions the financial blow. Similar mechanism, but a whole new market. While their biggest competitor, Polymarket, went offshore and on crypto, Kalshi spent two full years during the pandemic asking for federal permission. Tarek was actually in Beirut during the port explosion when it killed 200 people. During the day, he pulled people from rubble, at night he wrote federal filings. In November 2020, they became the first federally regulated prediction market in US history, letting people trade on everything from the Fed rate to the Oscars to hurricanes. Election betting is the big prize, but the government kind of stiff-armed them on it, so Luana sued the regulators. In September 2024, they won right before the US presidential election, when it went live. They did over a billion dollars in transactions on that event alone. The growth after that is a hockey stick. Slow growing until 2024, then from $2 billion to $24.2 billion last year and still accelerating. Winning in federal court didn't end the fight. It started new ones in many states. Nevada, Ohio, and Arizona all suing. Beyond the court, critics also worry that letting people profit from elections can create dangerous incentives. Investors bet on it anyway. $2.6 billion raised at a $22 billion dollar valuation just this month. $1.2 billion in annualized revenue. Luana is now the youngest self-made female billionaire in the world at age 29. But the company she and Tarek built is still fighting in court whether it should even exist. Which company should we cover next?

The Kalshi story has everything.

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