By Dan Bernstein
Assistant Editor
About a month ago, cryptocurrency investment firm Pantera Capital published a bold prediction about prediction markets. It said a betting exchange not named Kalshi or Polymarket would be bought for more than $1 billion this year.
On Thursday, Pantera announced that it led a $75 million raise for Novig, a sports-focused prediction market betting app that recently applied for federal regulatory approval with the Commodity Futures Trading Commission (CFTC). Novig CEO Jacob Fortinsky said in a video interview that the raise values his company at $500 million, meaning participants in this round are collectively acquiring about 7% of the firm. Pantera accounts for “the super-majority” of the investment.
As cryptocurrency slumps after a multiyear bull run, prediction market exchanges present a hot alternative for crypto-focused venture capital firms like Pantera to invest.
“If you follow crypto, it’s not having its hottest moment,” Fortinsky said. “You have a lot of participants who now see that there’s actually more liquidity, product market fit and real-world tangibility in event contracts.”
Pantera rarely invests in companies outside of cryptocurrency—and Novig isn’t known for its crypto implementations. Fortinsky said Novig will make it easier to use tokens to buy and sell prediction-market contracts within its app.
But the tie-up may also reflect a desire from Pantera to diversify its portfolio beyond cryptocurrency, following a recent plunge in value.
The price of Bitcoin has dropped by about 45% since early October, while less valuable tokens such as Solana have fallen by larger percentages. Many crypto backers—both institutional and retail—have taken an interest in prediction markets.
Kalshi and Polymarket, the two biggest prediction-market exchanges in the world, each said they were valued at more than $10 billion last year. Their rapid growth has inspired a rush of companies, including ones in crypto, into the sector.
On Tuesday, Dragonfly Capital, another crypto-focused venture capital firm, closed a $650 million fund that plans to put some of its cash toward prediction-market investments.
Meanwhile, Coinbase and Gemini, two prominent firms anchored by retail crypto trading, have started brokering for prediction-market exchanges in recent months as diminished crypto activity eats at their revenue.
“Historically, we’ve had achievements in driving diversification,” Coinbase CFO Alesia Haas said on a fourth-quarter earnings call, while CEO Brian Armstrong called prediction markets a “natural extension” of the company’s core business.
Novig’s raise follows an $18 million round on Aug. 11. It has now raised more than $100 million total.
The company is in the process of changing its business model from the dual-currency sweepstakes format battered by new state bans. The Pantera-led raise signals its confidence that the CFTC will approve Novig’s application to gain federal recognition.
Fortinsky said the cash influx also reflects Novig’s specific allure as an app with institutional sports knowledge.
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