Source: Forbes

Author: Alicia Park

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 Mansour) billionaires. Luana Lopes Lara is the world's youngest self-made female billionaire.

Luana graduated from MIT with a degree in Computer Science.

During her college years, her summer internships included positions at Ray Dalio's Bridgewater Associates and Ken Griffin's Citadel. In just six years, she built a startup valued at $11 billion.

However, the Brazilian entrepreneur still refers to her high school years as "the most stressful time of her life": at the Bauerjoie Theatre School in Brazil, her ballet teacher once placed a lit cigarette under her thigh while she stretched her legs to her ears—to test how long she could hold that position without getting burned.

 Luana studied at the Bauerjoi Theatre School in Brazil and in 2014 went to the Salzburg State Theatre in Austria to perform professional dances in Swan Lake.

To gain an edge in competitions, dancers would hide shards of glass in each other's shoes. In addition, this brutal training program included academic classes from 7 a.m. to noon and ballet training from 1 p.m. to 9 p.m.

The rigor and intensity of ballet training were only a small part of her grander ambition: she wanted to be the next Steve Jobs.

Partly inspired by her mother, a math teacher, and her father, an electrical engineer, Luana studied late into the night for academic competitions, winning a gold medal in the Brazilian Astronomy Olympiad and a bronze medal in the Santa Catarina Mathematics Olympiad.

For nine months after graduating high school (after graduating in December of that year), she performed as a professional ballet dancer in Austria before taking off her ballet shoes and embarking on her next journey in the United States.

Now, 29-year-old Luana has just become the world's youngest self-made female billionaire, replacing 31-year-old Scale AI co-founder Lucy Guo, who took the title from Taylor Swift in April.

She and her co-founder Tarek Mansour, also 29, both entered the "three-comma club" (meaning net worth exceeding one billion US dollars) after their prediction market company raised $1 billion at a valuation of $11 billion.

Paradigm, a venture capital firm focused on the crypto space, led the funding round announced on Tuesday. Other investors included Sequoia Capital, Andreessen Horowitz, and Y Combinator.

This company, which allows users to bet on the outcomes of future events such as elections, sporting events, and pop culture phenomena, reached a valuation of $5 billion after raising $300 million in October of last year, and $2 billion after raising $185 million in June. In less than six months, Kalshi's valuation soared more than fivefold, increasing the net worth of the two young co-founders (each estimated to hold about 12% of the company) to $1.3 billion.

 Luanna Lopez Larra (left) and Tarek Mansur (right) founded Kalshi in 2018.

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

According to the company, Kalshi’s notional trading volume has increased eightfold since July, reaching $5.8 billion in November.

According to data from Dune Analytics, its main competitor Polymarket's trading volume has more than tripled since July, reaching $4.3 billion, and its own 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, took similar courses, and both majored 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 their friendship deepened after they both landed internships at Five Rings Capital in New York City in 2018.

One evening, on their walk back to their interns' apartments in the financial district, the idea of forecasting market business suddenly came to them.

“We see most trades happen when people have some 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 the outcome of an election or the likelihood of a natural disaster—into their investment decisions.

Based on the belief that "there should be a way to directly trade the probability of an event 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 remained unclear, and the co-founders soon faced a tough battle. Michael Seibel, emeritus partner at Y Combinator, recalled the early days of 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 after graduating from university, we took on a huge risk. For two whole years, we had no products—nothing was released—and if we didn’t get regulatory approval, the company would be nothing,” Lopez Lara recalled. During the pandemic, she tried to build 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 in the city, and for weeks, he worked on Kalshi’s project 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 previously worked at the U.S. Commodity Futures Trading Commission, helped the founders complete the 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, which categorized its prediction market as a type of derivative called "event contracts."

This approval also gave them a competitive edge. Polymarket, a blockchain-based marketplace, was not federally regulated at the time and was fined $1.4 million by the CFTC in 2022 for operating an unregistered marketplace.

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 for the 2024 US presidential election, citing its gambling-like nature, 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 went ahead anyway.

In September 2024, a U.S. District Court judge ruled in favor of Kalshi, making history by establishing the company as the first regulated election contract market in the United States in over a century.

“We really want to do things the right way because our vision is to build the world’s largest financial exchange,” Luana said. “Legally operating is something we cannot compromise on.”

In the lead-up to the election, Kalshi's user base doubled, with users betting over $500 million on either Trump or Kamala Harris. Its users correctly predicted a Trump victory a month before election night. (Polymarket users wagered a total of $3.6 billion on the presidential election.)

“Few training programs teach you to keep going when you’re told you can’t—an injury or even a short break can mean losing your place,” says 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 US presidential election, Kalshi says it now handles over $1 billion in weekly trading volume, with over 90% of that driven by sports contracts. In January, Donald Trump Jr. joined Kalshi's advisory board. (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 funds will be used to expand integration 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 challenges.

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 have never invested in a company that has such a huge potential impact on the world."