Founders Fund raises around $45 million for Polymarket in latest funding round

May 15, 2024 1:26 PM
  • Mia Doyle, Special to CDC Gaming Reports
May 15, 2024 1:26 PM
  • Mia Doyle, Special to CDC Gaming Reports

Polymarket, a crypto-powered online marketplace that offers betting contracts on events such as political elections, has secured around $70 million in two funding rounds. San Francisco-based venture capital firm Founders Fund spearheaded the Series B funding round, raising $45 million. However, the company’s funding comes as election betting is scrutinized and may face a federal ban.

Story continues below

Through Polymarket event-betting contracts, users can bet on world events using cryptocurrency, such as who will be the next James Bond or whether Justin Bieber’s baby will be a boy or a girl. More than $125 million has been wagered on the 2024 presidential election, with former President Donald Trump as the favorite.

“Ultimately we have the deep conviction that markets on all the things that people are wondering about and have opinions on will exist,” said Shayne Coplan, Polymarket founder and CEO.

While election gambling is illegal under U.S. federal law, many companies have lobbied the Commodity Futures Trading Commission to ease the restrictions. However, last week, the CFTC voted in favor of adopting rules that would ban event contracts “contrary to the public interest,” including political contests. The CFTC must publish a final version of the rules for public review before the regulation is implemented.

Polymarket, which operates as an offshore betting platform and does not fully adhere to U.S. regulations, has received regulatory sanctions. In January 2022, the company was forced to pay a $1.4 million penalty as part of a legal settlement with the CFTC that demanded the company “wind down” U.S. markets that do not comply with the Commodity Exchange Act.

Founded in 2005, Founders Fund invests in “companies building revolutionary technologies.” Among its investors are Ethereum co-founder Vitalik Buterin and PayPal co-founder Peter Thiel. The investment in Polymarket marks the first time that Founders Fund has invested in a platform that facilitates event-betting contracts.

Venture capital firm General Catalyst also raised about $25 million in a Series A round, bringing the total funding to $70 million.