From ballet dancer to youngest billionaire: Luana builds a multi-billion dollar Kalshi

Author: Alicia Park, Source: Forbes

Original Title: How Kalshi’s Cofounder Went From Professional Ballerina To World’s Youngest Self-Made Woman Billionaire

Kalshi is currently valued at $11 billion, making its two co-founders (Luana Lopes Lara and Tarek)...

Luanna Lopez Lara (left) and Tarek Mansour (right) founded Kalshi in 2018.

“Now that Kalshi has shown how big this market is, there are many others who want a piece of the pie,” said Ali Patovi, CEO of venture fund Neo, the company’s seed investor.

“Now that Kalshi has shown how big this market is, there are many others who want a piece of the pie,” said Ali Patovi, CEO of venture fund Neo, which was the company’s seed investor.

According to the company, Kalshi's notional trading volume has increased eightfold since July, reaching $5.8 billion in November. Meanwhile, according to Dune Analytics, its main competitor, Polymarket, has seen its trading volume more than triple since July, reaching $4.3 billion, and its valuation has soared to $9 billion. Luana and Mansour, who grew up in Lebanon, met at MIT. They were members of the same international student circle, taking similar courses and both majoring in computer science. Mansour, who experienced the 2007 Lebanon conflict and taught himself English while preparing for the SAT, remembers Luana always sitting in the front row in class. The two became acquainted after Mansour started sitting next to her and learning from her, and grew even closer after both securing internships at Five Rings Capital in New York City in 2018. One evening, on their walk back to their intern apartments in the financial district, the idea for predictive market trading suddenly came to them. “We see that most trading happens when people have some kind of idea about the future and then try to find a way to put that into the market,” Luana previously told Forbes. She added that traders and investors incorporate external events—such as election results or the likelihood of natural disasters—into their investment decisions. Based on the belief that "there should be a way to directly trade the probability of events occurring, rather than indirectly through traditional financial markets," they applied to the startup accelerator Y Combinator and were accepted in 2019. However, the legality of prediction markets was still unclear, and the co-founders soon faced a tough battle. Michael Seibel, an emeritus partner at Y Combinator, recalled the early days working with the two: when they realized they needed federal approval to legally operate a prediction market, they contacted more than 40 law firms for help, but none were willing to assist because the founders were too young and the company too small. "Right out of college, we took on a huge risk. For two whole years, we had no product—nothing was released—and if we didn't get regulatory approval, the company would be gone," Lopez Lara recalled. During the pandemic, she tried to establish a business in London, while Mansour returned to his home in Beirut. (There he experienced the deadly port explosion that killed more than 200 people, and for weeks he handled Kalshi's work at night and helped clean up the community and search for survivors during the day.) Ultimately, all it took was one lawyer to say "yes": Jeff Bandman, who had worked at the U.S. Commodity Futures Trading Commission, helped the founders with their application for federal approval and assisted them in negotiating when regulators objected. In November 2020, Kalshi received CFTC approval to become a designated contract market, classifying its prediction market as a type of derivative called "event contracts." This approval also set them apart from the competition. Polymarket, based on blockchain technology, was not federally regulated at the time and was fined $1.4 million by the CFTC in 2022 for operating an unregistered market. All of this gave Kalshi a temporary advantage. (Polymarket was approved to launch in the US last September. Its founder, Shane Copeland, is 27 and has become one of the youngest billionaires thanks to a recent $2 billion investment from the New York Stock Exchange's parent company.) However, the regulatory battle didn't end there. In late 2023, when regulators rejected Kalshi's election contract, which was to be launched before the 2024 US presidential election, citing "election contracts as gambling," it was Luana who suggested suing the CFTC. "All the other investors in the company said it would be a terrible idea," Patovie recalled. But the two did it anyway. In September 2024, a U.S. District Court judge ruled in favor of Kalshi, making the company the first regulated election contracts market in the United States in over a century, a historic achievement. “We really want to do things the right way because our vision is to build the world’s largest financial exchange,” said Luana. “Legally operating is something we cannot compromise on.” During the pre-election preparation phase, Kalshi’s user base doubled, with users betting over $500 million on either Trump or Kamala Harris. Its users correctly predicted President Trump’s victory a month before Election Night. (Polymarket users have wagered a total of $3.6 billion on the presidential election.) "Few training programs teach you to keep going even when told 'no'—an injury or even a short break can mean losing your place," said Alex Imerman, a partner at a16z. "Luana learned graceful perseverance early on…and she brought that calm confidence to the founding of Kalshi." Despite initial skepticism about its ability to maintain momentum after the U.S. presidential election, Kalshi says it now handles over $1 billion in trades per week, with over 90% of those trades driven by sports contracts. In January, Donald Trump Jr. joined Kalshi's advisory board. (Donald Trump Jr. also joined the advisory board of its rival Polymarket last September.) Kalshi has now integrated with brokers such as Robinhood and Webull, and even brought in hedge fund Susquehanna International Group to increase liquidity in its market. Recently, Kalshi has signed partnerships with companies ranging from the National Hockey League to online marketplace StockX, and has even made a major foray into the crypto space through integration with blockchain platform Solana. The company stated that the new funding will be used to expand its integrations with brokers and to forge new partnerships with news organizations. However, it still faces regulatory pressure from some states that have taken legal action against Kalshi's sports contracts, arguing that these contracts should be regulated and taxed at the state level. But given that the company has successfully overcome what once seemed like insurmountable regulatory hurdles, Kalshi's investors remain optimistic about the founders' ability to overcome difficulties. For Seibel (a partner at Y Combinator), who has invested in thousands of companies throughout his career, this is just the beginning: "In my experience, we've never invested in a company with such a huge potential impact on the world."