$HOOD In an interview with Reuters, Robinhood signaled openness to an acquisition to fuel their predictions market platform.
Per JB McKenzie: "We as a firm are going to be looking to see if there is an acquisition that's available."
Let's look at some candidates.
1⃣ KALSHI
@Kalshi is a natural fit, both in terms of culture and they already backend most of the tech behind Robinhood's predictions market in the US. Their product is excellent, as is their leadership team.
Their valuation per a recent fundraise moved from $3b earlier in this summer to $5b. Kalshi is growing extremely quickly, overtaking volume vs Polymarket. IF Robinhood pursued an acquisition here, it'd almost certainly be at a premium to that.
Additionally, Kalshi just launched internationally; something Robinhood Predictions Markets are also eyeing.
WHY THEY MIGHT NOT BE THE TARGET
This is a larger acquisition than what Robinhood has ever done. Usually they pursue smaller acquisitions they can simply use their cash, which they've done effectively. Here, they'd either have to take on debt (they have no debt and a $3.8b line of credit) or do a cash + equity deal
Second, Kalshi and Robinhood may be better partners (at least here in the US) than under one platform simply from a regulation / regulators standpoint.
2⃣ POLYMARKET
Polymarket is the other giant in the space. They're not able to be in the United States at this point.
They've grown from a $1b valuation back in August to a pre-money valuation of $8b (based on the $2b infusion from Intercontinental exchange.
While they've been overtaken by Kalshi, when they can get into the United States, they'll take some market share. Further, they're actually DOMINANT when looking at ex-sports predictions. If Robinhood wants to focus on international predictions growth, and expand these outside of a primarily sports-related setup, this would be a good direction to go.
WHY THEY MIGHT NOT BE THE TARGET
If size and regulators were yellow lights for a Kalshi acquisition, they may be red lights for a Polymarket acquisition as both are even larger issues here. Further, we'll have to see if Kalshi can take market share from Polymarket when competing head to head.
3⃣ LIMITLESS
Limitless is the only other one that shows up in terms of volume. Limitless is about to cross $500m traded volume, which is a distant third, two Kalshi and Polymarket. It's been around for more than a year and is very heavily positioned on Discord. They're positioned more toward very short-dated predictions (hourly and daily resolutions) over longer-term predictions.
I don't really love the UI, but they are accelerating rapidly.
WHY THEY MIGHT NOT BE THE TARGET
Limitless is growing, but I'm not sure it has the focus that Robinhood has for the space. It's just a very different offering than what they've done, and it probably makes more sense to buy one at scale (Kalshi) or a startup if more focused on the talent and tech.
4⃣ OTHER STARTUPS (The Clearing Company, Myriad, etc)
The Clearing Company is one of many startups in the predictions space. They just had a $15m fundraising round, so this would be a very small acquisition. They have an interesting looking UI that seems a good fit for Robinhood, with a number of cross-market (more than just sports) parlays, and it's very well integrated with multiple crypto chains.
What's most interesting here is the staff, led by a blend of Kalshi and Polymarket leaders.
The fit may make sense as Robinhood can take care of distribution while these guys focus on the backend.
---
Myriad has a great UI, but is quite a bit smaller both in terms of volume (minimal) and markets (just 21 crypto markets, 19 sports markets as examples). And the volume really isn't there, with some predictions having volume in the hundreds of dollars (NOT hundreds of thousands).
On September 1st they noted they crossed over $10m traded using $USDC, and on October 8th were very close to $20m. They're accelerating rapidly.
WHY THEY MIGHT NOT BE THE TARGET
This would mostly be a talent and UI acquisition as this is essentially pre-revenue. This wouldn't help to scale predictions as rapidly as the two large players in the space. There are other startups out there as well, but Robinhood might not see enough of an advantage to acquire these vs just building in-house.
FINAL THOUGHTS
I think Robinhood either acquires Kalshi (assuming they're open to that), or one of the many startups as a much smaller acquisition target.
Per JB McKenzie: "We as a firm are going to be looking to see if there is an acquisition that's available."
Let's look at some candidates.
1⃣ KALSHI
@Kalshi is a natural fit, both in terms of culture and they already backend most of the tech behind Robinhood's predictions market in the US. Their product is excellent, as is their leadership team.
Their valuation per a recent fundraise moved from $3b earlier in this summer to $5b. Kalshi is growing extremely quickly, overtaking volume vs Polymarket. IF Robinhood pursued an acquisition here, it'd almost certainly be at a premium to that.
Additionally, Kalshi just launched internationally; something Robinhood Predictions Markets are also eyeing.
WHY THEY MIGHT NOT BE THE TARGET
This is a larger acquisition than what Robinhood has ever done. Usually they pursue smaller acquisitions they can simply use their cash, which they've done effectively. Here, they'd either have to take on debt (they have no debt and a $3.8b line of credit) or do a cash + equity deal
Second, Kalshi and Robinhood may be better partners (at least here in the US) than under one platform simply from a regulation / regulators standpoint.
2⃣ POLYMARKET
Polymarket is the other giant in the space. They're not able to be in the United States at this point.
They've grown from a $1b valuation back in August to a pre-money valuation of $8b (based on the $2b infusion from Intercontinental exchange.
While they've been overtaken by Kalshi, when they can get into the United States, they'll take some market share. Further, they're actually DOMINANT when looking at ex-sports predictions. If Robinhood wants to focus on international predictions growth, and expand these outside of a primarily sports-related setup, this would be a good direction to go.
WHY THEY MIGHT NOT BE THE TARGET
If size and regulators were yellow lights for a Kalshi acquisition, they may be red lights for a Polymarket acquisition as both are even larger issues here. Further, we'll have to see if Kalshi can take market share from Polymarket when competing head to head.
3⃣ LIMITLESS
Limitless is the only other one that shows up in terms of volume. Limitless is about to cross $500m traded volume, which is a distant third, two Kalshi and Polymarket. It's been around for more than a year and is very heavily positioned on Discord. They're positioned more toward very short-dated predictions (hourly and daily resolutions) over longer-term predictions.
I don't really love the UI, but they are accelerating rapidly.
WHY THEY MIGHT NOT BE THE TARGET
Limitless is growing, but I'm not sure it has the focus that Robinhood has for the space. It's just a very different offering than what they've done, and it probably makes more sense to buy one at scale (Kalshi) or a startup if more focused on the talent and tech.
4⃣ OTHER STARTUPS (The Clearing Company, Myriad, etc)
The Clearing Company is one of many startups in the predictions space. They just had a $15m fundraising round, so this would be a very small acquisition. They have an interesting looking UI that seems a good fit for Robinhood, with a number of cross-market (more than just sports) parlays, and it's very well integrated with multiple crypto chains.
What's most interesting here is the staff, led by a blend of Kalshi and Polymarket leaders.
The fit may make sense as Robinhood can take care of distribution while these guys focus on the backend.
---
Myriad has a great UI, but is quite a bit smaller both in terms of volume (minimal) and markets (just 21 crypto markets, 19 sports markets as examples). And the volume really isn't there, with some predictions having volume in the hundreds of dollars (NOT hundreds of thousands).
On September 1st they noted they crossed over $10m traded using $USDC, and on October 8th were very close to $20m. They're accelerating rapidly.
WHY THEY MIGHT NOT BE THE TARGET
This would mostly be a talent and UI acquisition as this is essentially pre-revenue. This wouldn't help to scale predictions as rapidly as the two large players in the space. There are other startups out there as well, but Robinhood might not see enough of an advantage to acquire these vs just building in-house.
FINAL THOUGHTS
I think Robinhood either acquires Kalshi (assuming they're open to that), or one of the many startups as a much smaller acquisition target.
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