The founders of the two largest prediction market platforms in the U.S. are betting there is money to be made beyond the exchanges themselves.

Shayne Coplan, CEO of Polymarket, and Tarek Mansour, co-founder and CEO of Kalshi, are backing a new venture firm called 5c(c) Capital — named after the section of the Commodity Exchange Act that governs event contracts — to invest specifically in startups building around prediction markets, Bloomberg reported Sunday.

The fund plans to raise up to $35 million and invest in around 20 early-stage companies over two years. Rather than backing new exchanges, the strategy targets the infrastructure layer: data tools, liquidity provision services, and compliance systems that support the growing ecosystem.

"We want to capitalize on the second-, third-, and fourth-order effects of what we built ourselves," the founders wrote in a document viewed by Bloomberg.

More than 20 investors have already committed, including a portfolio manager at Millennium Management and founders of other prediction market platforms such as PredictIt. The fund claims to be the first venture vehicle built specifically around the legal and market structure of prediction markets under the Commodity Exchange Act.

Context

The launch comes as prediction market platforms hit new highs in trading volumes. Major retail platforms including Coinbase, Kraken, and Robinhood have all added event contracts in recent months, driven by retail and institutional interest that has expanded well beyond politics into economic data releases and cultural events.

Polymarket runs on-chain; Kalshi operates as a CFTC-regulated exchange. The two platforms have been direct competitors. The joint backing of 5c(c) Capital suggests both see the ecosystem around prediction markets as collectively more valuable than any competitive dynamic between them.

If the fund hits its $35M target, it would signal that prediction markets have matured past novelty — into an ecosystem large enough to sustain a dedicated venture tier.