The Clearing Company, a newly established prediction market platform founded by former executives of Polymarket and Kalshi, confirmed a $15 million seed funding round on Wednesday.
Key Takeaways
- The Clearing Company has secured $15 million in seed funding led by Union Square Ventures, with Coinbase Ventures and others participating.
- The startup will aim to compete with Polymarket and Kalshi.
- The platform was founded by former Polymarket and Kalshi executives.
Union Square Ventures led the investment, with backing from Haun Ventures, Variant, Coinbase Ventures, and several other investors. According to the company, it is developing a permissionless, on-chain, and regulated prediction market designed to improve transparency and accessibility in event-based wagering.
The platform enters a competitive landscape where Polymarket and Kalshi are already established leaders. The Clearing Company is headed by Toni Gemayel, previously the head of growth at both Polymarket and Kalshi, and employs several former Polymarket staff members.
Activity across the sector has also intensified. Polymarket recently reported more than 286,000 active traders in July, reversing a six-month decline, while Kalshi has expanded by hiring crypto influencer John Wang as head of crypto. Robinhood also plans to enter the space by partnering with Kalshi to introduce sports betting markets.
However, challenges remain. Ethereum co-founder Vitalik Buterin recently criticized leading prediction platforms for not offering interest on deposits, limiting their usefulness for hedging.
Despite these concerns, The Clearing Company's funding highlights strong investor belief in prediction markets. Backing also comes from Compound, Rubik, Earl Grey, Cursor Capital, Asylum, and several high-profile angel investors.
Donald Trump Jr. expands role in prediction markets
The momentum surrounding prediction markets has also been fueled by prominent political involvement. Donald Trump Jr. joined Polymarket's advisory board after 1789 Capital, a venture capital firm co-led by him, invested in the company.
The fund, which is "anti-ESG" in its approach and oriented towards US-headquartered startups with conservative values, announced its investment publicly on Aug. 26 without making public financial terms.
Trump Jr. called Polymarket a tool for transparency, noting its ability to enable users to wager on real events irrespective of media or expert narratives. He showed interest in assisting Polymarket in furthering its mission of expanding access to prediction markets nationwide.
The move follows his earlier appointment to rival Kalshi's advisory board and indicates a larger foray into the prediction market industry. Both Polymarket and Kalshi continue to struggle with navigating the US regulatory landscape, particularly regarding sports contracts.
"This strategic investment marks a significant milestone for Polymarket," said company founder and CEO Shayne Coplan. "Our long-term partnership with 1789 Capital will help reinforce Polymarket’s leading position as a trusted source of free, transparent and accurate market information in the US and around the world."
