The Wall Street Journal reported that 1789 Capital, the investment firm where Donald Trump Jr. is a partner, plans to invest about $300 million more in prediction market platform Polymarket.
The money is part of a new funding round of roughly $1 billion led by 1789 Capital. If the transaction closes, Polymarket is expected to be valued at about $21 billion. 1789 Capital has already invested about $200 million in the company, and completion of the new round would likely make it one of Polymarket’s largest shareholders.
How 1789 Capital grew
1789 Capital was founded in October 2022 by investment banker Omeed Malik, Rebekah Mercer, and entrepreneur Chris Buskirk, with Malik serving as president.
Malik graduated from Colgate University and Emory University School of Law. He began as a corporate lawyer, then moved to MF Global, and later worked at Bank of America Merrill Lynch in prime brokerage.
In early 2018, Malik left after an investigation tied to allegations from a subordinate. He later filed a $100 million arbitration claim accusing the bank of defamation and discrimination. In July that year, Bank of America agreed to pay an undisclosed multi-million-dollar settlement. Neither side publicly offered a final conclusion on the underlying facts.
Malik later launched boutique investment bank Farvahar Partners, backed conservative new media projects, and also served as chairman of a SPAC. In his own account, his political shift began with dissatisfaction over the government’s handling of the COVID-19 pandemic. His investment narrative then moved toward anti-ESG and anti-DEI themes.
After the 2024 election, Donald Trump Jr. joined 1789 Capital as a partner, and the fund expanded quickly after that.
Its growth equity fund stood at about $150 million to $200 million in early 2025, crossed $1 billion by September that year, reached $2 billion by the end of December and closed to new investors, then rose to about $3.5 billion in assets under management by May 2026. That was roughly 17 times its size at the start of 2025.
Portfolio spans AI, defense, consumer, and space
1789 Capital has invested across a wide range of sectors. Its AI positions include Cerebras, Groq, Perplexity, Databricks, and Crusoe. In defense and industrials, it has backed Anduril, Hadrian, and Vulcan Elements. Consumer investments include e-commerce platform GrabAGun, vaping brand Juul, and PublicSquare. In space, it has exposure to SpaceX and Axiom Space. The fund also participated in financing for Elon Musk’s Neuralink, X, and xAI.
According to CNN, in the first 500 days after the start of Trump’s second term, 10 defense, aerospace, and software companies backed by 1789 Capital received more than $1.6 billion in federal contracts and grants combined. 1789 said it had never discussed federal contracts for portfolio companies with the government. A spokesperson for Donald Trump Jr. said he does not connect companies he invests in or advises with federal agencies.
The most closely watched case is Vulcan Elements. In August 2025, 1789 Capital invested when the company was valued at about $200 million. Three months later, the Pentagon extended a $620 million loan, and the Commerce Department added a $50 million grant. The company’s valuation then jumped to about $2 billion. Senator Elizabeth Warren and others later signed a letter alleging serious self-dealing in the transaction.
Trump Jr. has ties to both Kalshi and Polymarket
Polymarket is another name that keeps surfacing around the firm. Donald Trump Jr. has served as a paid strategic adviser to Kalshi since January 2025 and received company stock worth about $300,000. In August 2025, against the backdrop of 1789 Capital’s investment in Polymarket, he also joined Polymarket’s advisory board.
The two companies compete directly, and Trump Jr. now sits within both circles. His spokesperson said that would not change his role at Kalshi. At the same time, Trump Media & Technology Group at one point planned to embed its own prediction product, Truth Predict, into Truth Social and discussed offering Truth API to Wall Street.
Fortune reported that there is currently no public evidence showing Donald Trump Jr. or the Trump family used government insider information for trading. Even so, the overlap between presidential public information, market trading, and family business interests has drawn scrutiny over potential conflicts.
Polymarket’s valuation moved with regulation and capital
Polymarket’s valuation jumps have largely followed regulatory or financing milestones.
In 2022, the Commodity Futures Trading Commission found that Polymarket had operated an unregistered derivatives exchange, fined it $1.4 million, and required it to block U.S. users. The platform then shifted offshore and used on-chain stablecoins to settle event contracts.
The 2024 U.S. election became a turning point. Political markets turned Polymarket into a global opinion venue, and trading volume rose sharply in the fourth quarter of that year.
In July 2025, the Department of Justice and the CFTC ended their earlier investigations without bringing charges. On July 21 that same month, Polymarket paid $112 million to acquire licensed exchange and clearinghouse QCEX, giving it a corporate vehicle for returning to the U.S. market. On Aug. 26, 1789 Capital announced a strategic investment, and Donald Trump Jr. joined the advisory board at the same time.
In October 2025, Intercontinental Exchange, the parent of the New York Stock Exchange, committed up to $2 billion at a pre-money valuation of about $8 billion. On Nov. 25, the CFTC issued an amended designation order allowing its U.S. entity to operate domestically through a futures commission merchant intermediary model. Once that door opened, large traditional finance players began entering in size.
In March 2026, Intercontinental Exchange invested another $600 million. The company disclosed holdings of about $1.6 billion, equal to around 22% of shares outstanding, making it the largest institutional shareholder at present. It has also recently indicated it may keep adding. In April 2026, another financing brought in firms including D.E. Shaw and G Squared, lifting the valuation to about $15 billion. Now 1789 Capital is leading a new round of about $1 billion, contributing about $300 million itself, with the post-money valuation targeting $21 billion. If completed, the firm would also move into the ranks of Polymarket’s largest shareholders.
Revenue figures tell very different stories
While valuation has surged, Polymarket’s revenue numbers do not line up neatly.
Polymarket began charging trading fees in January 2026. Third-party platform Sacra estimated annualized revenue at about $1 billion, while on-chain data platform DefiLlama put annualized revenue at about $162 million. The gap is close to eightfold. At a $21 billion valuation, the first figure implies a price-to-sales multiple of about 21x, while the second points to nearly 130x.
Market growth has favored rivals
Data platform Artemis shows that from October to December 2024, prediction markets were almost synonymous with Polymarket. This year, that picture started to reverse. The World Cup pushed weekly marketwide volume to about $17 billion at one point, and even after the tournament, weekly volume stayed above $10 billion. Most of the incremental activity, however, went to Kalshi.
By August, Kalshi’s non-sports volume was about $24.9 billion, while Polymarket’s was only about $1.5 billion. Polymarket’s share in crypto-related categories also slid from about 80% to about 10% within a year. Political markets remain its stronghold, where it has continued to hold roughly 90% share.
Even after regaining a compliant route into the U.S., Polymarket’s business remains centered overseas. On-chain data shows that in the week of Aug. 30, international users generated about $1.4 million in fee revenue, compared with about $610,000 from U.S. users. International users accounted for more than 70%, and trading volume was structured in roughly the same way.
Brokerages, exchanges, and on-chain protocols are all entering
As prediction market volume has grown, this is no longer a contest between only two companies. Centralized exchanges and on-chain protocols are both moving in, putting pressure on Polymarket from both directions.
Coinbase began offering prediction markets to U.S. users earlier this year, routing orders through Kalshi’s compliant rails, and the company said it was one of its fastest-launched new products. Robinhood embedded event contracts into its brokerage app even earlier, first sending traffic to Kalshi while preparing its own licensed exchange, Rothera. Crypto.com launched OG. Gemini launched Predictions. Interactive Brokers’ ForecastTrader and Webull have also listed similar products. The traffic gateway is shifting away from crypto-native websites and toward brokerages and exchanges that already hold customer accounts and balances.
On-chain competitors are fragmenting the market as well. Limitless on Base focuses on 15-minute and hourly crypto markets, and monthly volume at one point reached the billion-dollar range. On BNB Chain, Opinion and Predict.fun split macro themes and Binance Wallet traffic. Myriad is taking the embedded-media route. Azuro provides market infrastructure to dozens of front ends. Hyperliquid is bringing outcome contracts into its order book through HIP-4.
Exit questions are becoming harder to ignore
As capital keeps flowing in and the field grows more crowded, the issue of exits looks more urgent. For investors, the main paths are still a token launch or an IPO.
Last year, Polymarket executives publicly said there would be a token and an airdrop. Parent company Blockratize applied in February this year to register the POLY and $POLY trademarks. Intercontinental Exchange’s partnership announcement also mentioned future tokenization arrangements, though no issuance date or airdrop rules have been finalized.
The company has not yet filed an IPO prospectus. JPMorgan ended its banking relationship with Polymarket last year because of regulatory risk, but the bank said it still maintains several business relationships with the company and is considering taking part in any future IPO underwriting.