Prediction Market VCs Back New $35M Fund
A new venture capital firm, 5c(c) Capital, is launching with backing from Shayne Coplan, CEO of Polymarket, and Tarek Mansour, co-founder and CEO of Kalshi, Bloomberg reported. The fund, named after a section of the Commodity Exchange Act governing prediction markets, aims to capitalize on the growing interest in these markets and the infrastructure supporting them.
The Rise of Prediction Markets
Prediction markets have evolved from a niche corner of finance to a more mainstream method for tracking events. Trading volumes have increased since the U.S. Presidential election, attracting new users interested in betting on the outcomes of political events, economic data, and cultural phenomena. Platforms like Polymarket and Kalshi now offer contracts tied to a diverse range of events, effectively turning public opinion into tradable signals.
5c(c) Capital’s Investment Strategy
5c(c) Capital plans to raise up to $35 million and invest in approximately 20 portfolio companies over the next two years. According to the document viewed by Bloomberg, the fund’s strategy focuses on early-stage investments in infrastructure and services that support prediction markets, rather than the exchanges themselves. This includes data tools, liquidity services, and compliance systems.
Backers and Industry Context
The fund has already secured backing from over twenty investors, including a portfolio manager at Millennium Management, several crypto-focused venture firms, and founders of other prediction market platforms, such as PredictIt. The launch of 5c(c) Capital reflects a broader trend of established players in the prediction market space investing in the ecosystem’s growth.
Polymarket declined to comment on the fund. Kalshi did not respond in time for publication.
The Kalshi-Polymarket Rivalry
The involvement of both Coplan and Mansour is notable given their well-documented rivalry. As reported by NPR, the two 20-something billionaires, who run the largest prediction market sites, have engaged in a long-running feud. Kalshi has taken a more regulated approach, operating as a Commodity Futures Trading Commission-regulated company within the U.S., even as Polymarket has adopted a more “Wild West” approach, operating offshore and allowing anonymous bets through cryptocurrency wallets. Futurism details how Mansour has positioned Kalshi as a safer and ethically superior alternative.
Despite their differences, their joint investment in 5c(c) Capital suggests a shared interest in fostering the growth of the prediction market industry as a whole. Fast Company notes that Mansour, an MIT graduate, and Coplan, an NYU dropout, represent different backgrounds within the fintech space.