Grammarly, a Ukrainian-founded company known for its AI-powered writing assistant, has raised $1 billion in non-dilutive financing from General Catalyst's Customer Value Fund (CVF), as the firm announced on Thursday. As of 2021, Grammarly was valued at $13 billion.
- Founded in 2009, Grammarly now supports over 40 million users daily. Its AI agents, including grammar and tone suggestions, rephrasing tips, and an AI detector, operate across more than 500,000 websites and apps, offering contextual support to users in real time.
- In January 2025, Grammarly acquired productivity platform Coda and named Shishir Mehrotra its new CEO, signaling a strategic shift towards building a suite of AI-powered workplace tools. Following the acquisition, the company's annual revenue exceeded $700 million.
"Integrating Coda and Grammarly has unlocked tremendous potential for how people work and communicate. I’m energized by the innovation happening across our teams as Grammarly has become a productivity platform serving everyone from individual students to growing businesses to large enterprises," said Shishir Mehrotra, Grammarly CEO.
- The company is now positioning itself as a comprehensive AI productivity platform for apps and agents, integrating communication-focused tools and enabling third-party applications to run on its infrastructure.
Details of the deal
- The recent investment marks one of the most significant allocations from General Catalyst's Customer Value Fund (CVF). As Reuters reports, unlike a traditional venture round, General Catalyst does not take an equity stake in Grammarly. Instead, the company will repay the capital along with a fixed, capped percentage of the revenue generated by using these funds for customer acquisition.
- This type of growth financing is beneficial as it helps companies cover sales and marketing costs upfront and gradually repay the investment from predictable subscription revenue over time. At the same time, such investments don't dilute ownership or affect the company's valuation.
- The fresh capital will fuel Grammarly's efforts in sales, marketing, strategic acquisitions, and product development. The proceeds will also support the company's expansion into enterprise markets and strengthen its position among major clients, including Atlassian, Databricks, and Zoom.
