What is the background of this new fund that the two major prediction market platforms have rarely joined forces to create?

Original Title: "Two Major CEOs in the Prediction Market Sector Appear Together, What is the Background of This 'Rookie' Fund?"

Original Author: Nicky, Foresight News

The two biggest competitors in the prediction market sector have reached a consensus on one matter.

On March 23, according to Fortune magazine, former Kalshi employee Adhi Rajaprabhakaran and Noah Zingler-Sternig are establishing a venture capital fund named 5c(c) Capital, aiming to raise up to $35 million, focusing on investments in prediction market startups, with the first round of fundraising expected to be completed within the next month.

This fund has received joint investment from Kalshi CEO Tarek Mansour and Polymarket CEO Shayne Coplan, a rare collaboration between the CEOs of two leading platforms, marking a milestone event in the prediction market field.

In addition to the CEOs of Kalshi and Polymarket, early supporters of the fund include venture capital giant Marc Andreessen (participating through the Moneta Luna fund), Ribbit Capital founder Micky Malka, and former Multicoin Capital co-founder Kyle Samani.

Marc Andreessen is a co-founder of a16z, and Kyle Samani announced on February 5 of this year that he would step down from his position at Multicoin Capital and exit the firm. The involvement of these two figures underscores the fund's uniqueness and significance. Elena Silenok, founder and managing partner of Moneta Luna, expressed confidence in Adhi's investment capabilities. Kyle stated in a statement that the coming years are a critical period for building infrastructure around prediction markets.

The competitive relationship between Kalshi and Polymarket is no secret. The former follows a compliance path regulated by the CFTC, while the latter enters with a crypto-native model, and the two platforms have long been in opposition regarding user acquisition, market share, and even regulatory battles. However, when an early employee of Klashi came out to raise funds, both CEOs chose to appear together on the investor list.

The logic behind this move is not complicated. The explosive growth of prediction markets has exceeded everyone's expectations: Kalshi's valuation has skyrocketed from $2 billion in June 2025 to $22 billion in March, and Polymarket also received a $2 billion strategic investment from an intercontinental trading platform in October 2025, now valued at $20 billion.

However, the bottlenecks in industry growth are becoming increasingly apparent, such as insufficient depth from market makers, lack of index products, and fragmented infrastructure, none of which can be solved independently by a single platform. Perhaps both CEOs believe that supporting a fund focused on ecological infrastructure is more valuable than continuing to consume each other in the existing race. Instead of fighting separately, it is better to work together to expand the pie.

The name 5c(c) Capital comes from Section 5c(c) of the Commodity Exchange Act, titled "New Contracts, New Rules." The fund's official website explains that this naming reflects its core philosophy: lasting innovation stems from the combination of new ideas and regulated oversight. Several media outlets have described this fund as the first dedicated VC fund in the history of the prediction market field.

According to fundraising documents, the fund plans to invest in about 20 companies over the next two years, covering market makers in prediction markets, index design tools, and other infrastructure projects surrounding event contracts.

Market makers are the core of liquidity in prediction markets. Currently, the open interest in prediction markets has reached $924 million, but most contracts still face issues of excessive bid-ask spreads and insufficient depth. Professional market makers can provide continuous quotes for various event contracts, reducing user transaction costs and enhancing market efficiency.

Index design tools are key to upgrading prediction markets from "single-event betting" to combinable financial products. Just as traditional financial markets have indices like the S&P 500 and Nasdaq 100, prediction markets also need standardized index products to help users track the overall performance of a certain category of event contracts. The infrastructure aspect includes a series of supporting systems from order book design, clearing mechanisms to compliance frameworks.

These elements together constitute the "upstream and downstream" of prediction markets, forming a complete ecosystem rather than just a few trading platforms.

5c(c) Capital was co-founded by two early employees of Kalshi. Adhi Rajaprabhakaran serves as founding managing partner; he joined Kalshi's affiliated market maker in 2022, becoming the second professional trader on the team, with over five years of experience in prediction market trading. He also runs a Substack column called "50¢ Dollars," focusing on regulatory and business analysis of prediction markets, and hosts related podcasts. Adhi holds a master's degree in economics from the University of Texas at Austin and a bachelor's degree in economics and data science from Michigan State University.

Noah Zingler-Sternig serves as founding general partner, having previously worked at Kalshi as the operations manager, responsible for market support, trader services, and Robinhood integration projects. His experience in prediction markets dates back to high school (around 2017), when he earned over $100,000 trading prediction markets to pay for college tuition. Noah graduated from the University of Wisconsin-Madison with a bachelor's degree in finance, investment, and banking, and previously worked as an analyst in JPMorgan's commercial banking division.

Fund advisor Ella Papanek also has a strong background in prediction markets. She graduated from Harvard University with a degree in statistics and worked as a quantitative sports trader at Susquehanna International Group (SIG) for about three years, while also being an early test user and active participant in prediction markets like Augur, Kalshi, and Polymarket. She is also a competitive chess player, having ranked among the top 100 women in the U.S.

The rapid expansion of prediction markets has also attracted regulatory attention. As Kalshi and Polymarket expand their platforms into the sports event market, U.S. Senators Adam Schiff and John Curtis will submit a bipartisan bill this week aimed at prohibiting entities regulated by the U.S. Commodity Futures Trading Commission (CFTC) (including Kalshi and Polymarket's U.S. platforms) from offering contracts related to sports events.

In mid-March, Arizona Attorney General Kris Mayes filed a criminal lawsuit against Kalshi, alleging that while Kalshi may claim to be a "prediction market," it is actually operating illegal gambling activities and accepting bets on Arizona elections, both of which violate Arizona law.

Despite facing legal challenges, the fundraising documents for 5c(c) Capital still describe prediction markets as "generational investment opportunities." The two founders hope to leverage their industry experience and network to provide capital and operational support for this emerging ecosystem. The fund's official website states: "We believe that event contracts and prediction markets will fundamentally change the way we understand risk-taking." This view is also reflected in data and capital.

According to Dune data, as of March 24, before publication, the cumulative number of independent users in prediction markets has exceeded 2.8 million, with open interest reaching $924 million, nominal trading volume hitting $152.4 billion, and total transaction count reaching 672 million. In the past week, nominal trading volume exceeded $6.4 billion.

Kalshi is currently undergoing a new round of financing at a valuation of $22 billion, led by Coatue Management, with financing exceeding $1 billion; its competitor Polymarket is negotiating financing with potential investors at a valuation of approximately $20 billion.

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