Polymarket CEO Shayne Coplan and Kalshi CEO Tarek Mansour have both invested in 5(c) Capital, a fund focused on prediction market infrastructure. The signal stands out because the two companies are direct rivals, yet their leaders are backing the same fund rather than another front-end trading venue.
Public information cited in the source says 5(c) is targeting about $35 million and plans to invest in roughly 20 companies. Its areas of interest include market makers, index design, and infrastructure for prediction markets. The fund is being driven by two early Kalshi employees: former trader Adhi Rajaprabhakaran and former operations lead Noah Zingler-Sternig.
5(c) is targeting the layer beneath the platforms
The fund is not framed as a search for the next Polymarket or the next Kalshi. Its focus is on the companies that support the market itself: liquidity providers, event index designers, cross-platform data services, trading tools, surveillance systems, risk controls, and settlement standards.
That approach reflects a structural issue in prediction markets. There may be no shortage of events to trade, but only a small share develop into markets with lasting depth and reliable pricing. Many contracts fail to attract enough participants, enough liquidity, or a settlement standard that traders trust. Platforms may compete for users, but infrastructure can be shared, and both Polymarket and Kalshi still need deeper liquidity and stronger pricing.
Kalshi roots shape the fund’s view of market structure
The source argues that 5(c)’s Kalshi lineage matters. Kalshi has taken the regulated US route and has spent years dealing with the CFTC, state-level oversight, and the boundaries of event contracts. That tends to produce a different lens from a typical crypto fund. The emphasis shifts from pure growth to market design: which events can be listed, which should not be tradable, where manipulation risks sit, why market makers hesitate, and where regulators are likely to tighten rules.
Under that view, the hardest question in prediction markets is not whether people want to bet on events. It is whether event trading can operate as a financial market that can withstand scrutiny over liquidity, manipulation, settlement disputes, and institutional compliance. Infrastructure becomes the answer to that constraint.
Three concentration layers could emerge over the next 12 to 24 months
The source says prediction markets could become concentrated across three layers over the next 12 to 24 months. The first is the front-end platform layer, where Polymarket and Kalshi are the clearest contenders today. Polymarket has built mindshare with global, crypto-native users, while Kalshi holds a regulated US access point.
The second layer is liquidity. A firm that can make markets across multiple venues, handle arbitrage, and stabilize pricing could become one of the most valuable positions in the sector. The third layer is data. As prediction market prices are consumed by media groups, funds, companies, and AI agents, probabilities themselves may turn into marketable data products, including recession odds, rate-cut odds, war-risk indexes, election volatility, AI breakthrough odds, and company event probabilities.
Regulatory pressure is raising the value of compliance tools
The source also ties the infrastructure thesis to regulation. An AP report said prediction markets are facing greater scrutiny over insider trading and illegal gambling concerns, including cases involving military personnel accused of using nonpublic information to bet on sensitive military actions and politicians participating in markets linked to their own elections. Kalshi also recently penalized and suspended three congressional candidates who bet on markets related to their own campaigns.
Several US states have started to act as well. The article says New York, California, and Illinois have recently imposed restrictions related to government employees using nonpublic information in prediction markets, and that the New York governor signed an executive order barring state employees from profiting on platforms such as Kalshi and Polymarket with insider information obtained through their jobs.
In that setting, identity checks, trade surveillance, insider-trading detection, manipulation monitoring, contract review, dispute handling, cross-platform risk systems, audit trails, and reporting tools all become more important. That is the layer 5(c) is trying to capture: not just more event trading, but the tooling required for prediction markets to operate inside a more formal financial framework.