Polymarket & Kalshi CEOs back new $35M prediction market VC

• 5c(c) Capital is raising $35 million to invest specifically in the prediction market ecosystem.
• The new venture fund is led by former Kalshi executives and backed by the CEOs of industry leaders Polymarket and Kalshi.
• The initiative arrives amid significant industry growth and a bipartisan legislative push in the U.S. Senate to restrict certain types of event-based betting.

Launch of 5c(c) Capital

A new specialized venture firm, 5c(c) Capital, has entered the market with a target of $35 million to support startups in the burgeoning prediction market sector. The firm is led by two prominent former employees of Kalshi: Noah Zingler-Sternig, the former Head of Operations, and Adhi Rajaprabhakaran, a former trader.

The fund's name is a direct reference to a specific clause in the Commodity Exchange Act that provides the Commodity Futures Trading Commission (CFTC) with oversight authority over event contracts. The firm has secured an impressive roster of high-profile backers, including:

• Shayne Coplan, CEO of Polymarket
• Tarek Mansour, CEO of Kalshi
• Marc Andreessen of a16z
• Micky Malka of Ribbit Capital
• Kyle Samani, formerly of Multicoin Capital

Market Growth and Institutional Interest

Investment and interest in prediction platforms have surged recently. Kalshi recently secured $1 billion in funding at a valuation of approximately $22 billion, while Polymarket is reportedly seeking a similar valuation in its own fundraising efforts. This capital influx is attracting both new specialized startups and established giants. Companies like Coinbase and DraftKings are exploring prediction platforms as significant drivers for future growth, while existing service providers in the niche are becoming prime targets for acquisitions.

Regulatory Climate and Industry Response

Despite the commercial momentum, the industry faces intensifying legal scrutiny. While CFTC Chairman Mike Selig has expressed support for properly structured event contracts, state-level regulators in the United States continue to challenge their legality. Furthermore, a bipartisan effort is currently underway in the U.S. Senate to ban sports-related betting on prediction markets.

Kalshi CEO Tarek Mansour criticized the legislative move, suggesting it favors the "casino lobby" and protects existing monopolies rather than consumers. He argued that such bans merely drive users toward unregulated offshore platforms. In a parallel move to address internal standards, Polymarket recently updated its terms of service to include stricter rules against insider trading and market manipulation.