Sports-based prediction markets app Onyx Odds raises $20 million in round led by Kraken parent Payward

Onyx Odds, a prediction markets app where users can wager on sports outcomes, said it has raised $20 million in a Series A round led by Payward, parent company of cryptocurrency exchange Kraken, the companies said Wednesday.

This new round of funding comes "less than two years after launch, and less than one year after coming out of beta," they also said in a statement. Onyx Odds was valued at $220 million during this round of financing.

Onyx Odds will face stiff competition in the prediction markets space, as leaders Kalshi and Polymarket have already established some level of dominance and name recognition, thanks in part to aggressive marketing. Kalshi recently hit a $22 billion valuation after raising $1 billion.

Several crypto exchanges, including U.S.-based Kraken competitors Coinbase and Gemini, have launched prediction market offerings as they look to expand into derivatives and other forms of betting. Meta, which oversees the biggest social media empire in the world by operating Facebook, Instagram and WhatsApp, is also targeting a launch of its own prediction markets capabilities. 

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"Onyx Odds enables users to engage with sports outcomes through exchange-traded instruments, offering a new, market-driven way to participate in sports markets," the companies said Wednesday. "As part of the investment, Onyx Odds will integrate with Payward Services, the B2B infrastructure platform behind Kraken and Payward's wider product suite."

Crypto trading will be integrated into the Onyx app, they added. Kraken, for its part, says it serves over 15 million users across more than 190 countries, according to company data.

Prediction markets, especially in the U.S., are confronting their fair share of headwinds amid legal challenges and insider trading concerns. Whether or not prediction markets, especially those focused on sports events, should be regulated at the state or federal level is a key part of the ongoing debate.

The Commodity Futures Trading Commission, under Chair Michael Selig, has argued that his agency has "exclusive jurisdiction" over prediction markets. Selig has positioned himself as an advocate for prediction markets and the CFTC's right to oversee their activity.

"We are the only U.S. platform that brings a CFTC-registered FCM, a CFTC-designated DCM and a global crypto exchange under one roof, making the full stack available through Payward Services," Head of Payward Services Mark Greenberg said in Wednesday's announcement.