In a significant development for the alternative finance sector, a new venture capital fund dedicated exclusively to prediction market startups has launched with substantial backing from the industry's leading figures. According to reports from Fortune and Bloomberg, 5c(c) Capital, a firm led by two employees from prediction market platform Kalshi, is raising up to $35 million.
The fund's launch, emerging from New York in early 2025, is marked by the pivotal personal investments of Kalshi CEO Tarek Mansour and its competitor Polymarket CEO Shayne Coplan. This move represents a powerful vote of confidence from rival founders in the prediction market ecosystem's future. The fund's name references Section 5c(c) of the Commodity Exchange Act, which governs such markets.
5c(c) Capital plans to invest in about 20 portfolio companies over the next two years, focusing on early-stage bets tied to infrastructure and services around prediction markets rather than the exchanges themselves. This includes startups building data tools, liquidity services, compliance systems, regulatory-tech solutions, niche vertical platforms, and technology infrastructure.
The launch coincides with a prediction market boom, with trading volumes climbing and new users entering the space since the U.S. presidential election. Platforms like Polymarket and Kalshi now host contracts on politics, economic data, and cultural events. The sector's growth has created new business opportunities beyond the core platforms, which the fund aims to capitalize on. Early backing includes over twenty investors, such as a portfolio manager at Millennium Management, several crypto-focused venture firms, and founders of other platforms like PredictIt.
Analysts view this as a classic sign of sector maturation, indicating that industry leaders see a market large enough for multiple winners. The fund provides a dedicated capital source for a niche that generalist VCs may find complex, and the involvement of sitting CEOs offers portfolio companies potential access to mentorship, partnership opportunities, and industry-specific growth tactics.
