Grammarly Nabs $1 Billion to Blow Up Their AI Game

Grammarly Nabs $1 Billion to Blow Up Their AI Game

Hey, so guess what? Grammarly, that cool writing helper everyone uses, just got a HUGE chunk of cash – like, a billion dollars! It's not like they're selling more of the company or anything, it's just a different kind of deal with this investment company called General Catalyst.

Why do they need all that money, you ask? Well, they wanna get even bigger! They're thinking beyond just helping you write better. They want to be a whole productivity thing, using AI to build more cool tools for talking and working. Plus, they have a ton of users, like 40 million every single day, and they want to let other companies put their tools on the Grammarly platform too. Pretty smart, right?

This money is gonna help Grammarly pay for stuff like sales and marketing, and maybe even buy other companies. General Catalyst is basically betting that by giving Grammarly extra cash just for getting new customers, Grammarly can use their regular money to make their product even better. So, General Catalyst doesn't get a piece of Grammarly, but they get a cut of the money that comes from those new customers. It's kind of a unique setup, tbh.

Grammarly has been around since 2009 and they actually make pretty good money, over $700 million a year! They're profitable, which is awesome. And recently, they got a new boss, Shishir Mehrotra, who used to run a different productivity company. That kinda tells you they're serious about getting into more AI stuff for work.

Shishir said in an interview that Grammarly is changing a lot. They're going from just a writing tool to a whole platform for different tools. He said it's super important for them to invest big in making new products, maybe even buying other companies, and just growing like crazy. He also mentioned they wanna go public eventually, but they're not in a rush. He's just focusing on making cool new things and growing fast for now. Makes sense!

If this investment works out, it could make Grammarly even more valuable. It might even help General Catalyst since they already invested in Grammarly back in 2017. Grammarly, which is based in San Francisco, has raised a bunch of money from investors over the years, over $550 million total. Back in 2021, they were worth about $13 billion!

General Catalyst has this special fund just for helping companies get more customers, separate from their usual investment stuff. They're trying to do things a little differently than just the old way of investing. This fund has invested in almost 50 companies, like Lemonade and Fivetran, focusing on helping them grow in a way that leads to more predictable earnings. Pranav Singhvi from General Catalyst said that companies like Grammarly are good at putting money into sales and marketing and getting a good return. And with all the AI stuff happening, giving Grammarly this extra money could help them get a lot more customers, maybe even beyond the 40 million they have now. Pretty cool stuff!