Grammarly Secures $1 Billion in Non-Dilutive Funding to Expand AI-Powered Productivity Platform

Grammarly secures $1B in non-dilutive funding from General Catalyst | TechCrunch

Grammarly has secured a $1 billion commitment from General Catalyst. The 14-year-old writing assistant startup will use the new funds for its sales and marketing efforts, freeing up existing capital to make strategic acquisitions. Unlike a traditional venture round, General Catalyst will not receive an equity stake in the company in return for the investment. Instead, Grammarly will repay the capital along with a fixed, capped percentage of revenue it generates from the use of General Catalyst's funds. The investment comes from General Catalyst's Customer Value Fund (CVF), a capital pool that helps late-stage startups with predictable revenue streams deploy new funding specifically to growing their businesses. CVF's alternative financing strategy essentially "lends" capital that is secured by a company's recurring revenue. For companies like Grammarly, this form of financing is advantageous because it's non-dilutive and does not reset the company's valuation. Grammarly was valued at $13 billion in 2021, during the peak of the ZIRP era. However, the company's valuation in today's market is significantly lower, according to an investor in the company who asked to remain anonymous. Grammarly didn't immediately respond to a request for comment. In December, Grammarly acquired productivity startup Coda and appointed its CEO, Shishir Mehrotra, to lead Grammarly. The company, which is evolving into an AI productivity tool following the acquisition, has annual revenue of over $700 million. General Catalyst's Customer Value Fund has provided funding to nearly 50 companies, including insurtech Lemonade and telehealth platform Ro. CVF maintains its own distinct limited partners and was not included in the firm's recent $8 billion capital raise. General Catalyst head honcho Hemant Taneja and Pranav Singhvi, co-head of CVF, talked with TechCrunch in greater length about the group's specialized financing strategy last fall.

Grammarly secures $1 billion from General Catalyst to build AI productivity platform

May 29 (Reuters) - Grammarly has raised $1 billion in non-dilutive financing from General Catalyst to expand its artificial intelligence (AI) offerings, aiming to grow into a comprehensive productivity platform, the companies said on Thursday. Grammarly, known for its popular writing assistant tool, plans to use the capital to fund sales and marketing costs and strategic acquisitions. It looks to use AI to build more communication-based productivity tools and even hosts third-party tools on its platform by leveraging access to its 40 million daily users. The investment, one of the biggest out of General Catalyst's Customer Value Fund (CVF), could help late-stage tech companies like Grammarly accelerate growth by using dedicated capital to acquire new customers. By reallocating funds typically tied up in sales and marketing, Grammarly can invest more in product development. In return, General Catalyst doesn't receive an equity stake in Grammarly, but will get a capped return linked to revenue generated through using this capital. This is structured as a percentage of the revenue generated from the fund being used in customer acquisition. Founded in 2005, Grammarly has an annual revenue exceeding $700 million and is profitable. In December, Grammarly appointed Shishir Mehrotra, previously CEO of the acquired productivity platform Coda, as its new leader, signaling a push into broader AI-powered workplace tools. "As Grammarly is going through a huge transformation of going from being a what is mostly known as a single-purpose agent to being an agent platform, it just felt very important for us to be able to bet big in our product development and in M&A as well as in our growth strategies," Mehrotra said in an interview. He added said the company has an eventual goal to go public, although no imminent plans. "I'm right now just focused on making sure we're innovating with new products, growing as fast as we can. But when we feel ready, we'll go public," Mehrotra added. The dedicated growth investment, if it pays off, could also benefit the valuation of Grammarly and General Catalyst's stake in the company, as it has also been an equity investor in Grammarly's series B funding in 2017. San Francisco-based Grammarly has raised over $550 million in venture capital, according to PitchBook. It was last valued at $13 billion in 2021. General Catalyst's Customer Value Fund operates by drawing capital from the firm's main investment fund, including a newly raised $8 billion. This approach is part of a strategic evolution for the investment firm, led by CEO Hemant Taneja, as it seeks to grow beyond the traditional venture capital model, including creating innovative funding mechanisms. Its customer acquisition fund has invested in nearly 50 companies, including Lemonade and Fivetran, as it leads on growth metrics to a more predictable path to returns. "Companies like Grammarly basically have a machine where they can invest dollars in sales and marketing and generate a very consistent return," said Pranav Singhvi, Managing Director at General Catalyst, "With this wave of AI, giving Grammarly the firepower to actually go and invest could land those customers beyond the 40 million." Reporting by Krystal Hu in New York; editing by Giles Elgood Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Artificial Intelligence Krystal Hu Thomson Reuters Krystal reports on venture capital and startups for Reuters. She covers Silicon Valley and beyond through the lens of money and characters, with a focus on growth-stage startups, tech investments and AI. She has previously covered M&A for Reuters, breaking stories on Trump's SPAC and Elon Musk's Twitter financing. Previously, she reported on Amazon for Yahoo Finance, and her investigation of the company's retail practice was cited by lawmakers in Congress. Krystal started a career in journalism by writing about tech and politics in China. She has a master's degree from New York University, and enjoys a scoop of Matcha ice cream as much as getting a scoop at work.

With An Eye Toward More Acquisitions, AI-Powered Grammarly Raises $1B from General Catalyst

San Francisco-based Grammarly says it has more than 40 million users and annual revenue of more than $700 million. The raise follows the company's acquisition of Coda in January, with Coda's CEO taking over leadership of the combined company. That acquisition helped Grammarly evolve from an AI-powered writing assistant to a productivity platform for apps and agents. The company plans to use its new capital, which came from General Catalyst's Customer Value Fund, "to scale sales and marketing and for strategic acquisitions." Founded in 2009, Grammarly had previously raised a total of $400 million in funding, according to Crunchbase data. General Catalyst also participated in the company's $110 million funding round in 2017 and its $90 million raise in 2019. Last October, General Catalyst raised $8 billion in new capital with an eye toward "turbocharging" its investments in sectors such as AI, defense, climate, healthcare and fintech. Grammarly's latest capital infusion underscores the extent to which AI has come to dominate venture funding. Over the past year, nearly half of U.S. venture funding went to AI-related enterprises, Crunchbase data shows. Later stage had the largest share, with roughly 61% of venture deals related to AI. AI dominates globally as well. Per Crunchbase's global funding report, AI was the leading sector for venture funding in the first quarter, with $59.6 billion invested. The first quarter marked the strongest quarter for AI funding ever, with a staggering 53% of global funding going to the AI sector alone. Related Crunchbase queries:

Grammarly raises $1B from General Catalyst to grow its AI productivity platform - SiliconANGLE

Grammarly raises $1B from General Catalyst to grow its AI productivity platform Grammarly Inc., best known for its artificial intelligence writing productivity platform, today announced it raised $1 billion in non-dilutive financing from General Catalyst to expand its offerings in a bid to grow its market dominance using AI apps and agents. This colossal funding round follows the company's acquisition of Coda in December, a productivity suite startup with a similar set of products to Google Workspace and Microsoft 365. Its products combine the features of a word processor, spreadsheet and other applications into a single cloud platform with a flexible document format that allows team collaboration. "Integrating Coda and Grammarly has unlocked tremendous potential for how people work and communicate," said Shishir Mehrotra, chief executive of Grammarly. "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." Grammarly boasts more than 40 million active users daily and an annual revenue of over $700 million. The company provides a productivity platform for users and businesses that can be accessed via the web or integrated into applications. According to Grammarly, it brings AI directly into more than 500,000 applications and websites, enabling AI agents for proofreading, paraphrasing, tone suggestion and AI-enabled writing enhancements. The addition of Coda brought Grammarly many productivity tools and capabilities, including Coda Docs, its document collaboration tools. Coda also launched Coda Brain, an AI document chatbot platform that can plumb through enterprise and company knowledge and surface information. "We've been working with the Grammarly team for years as they became an early leader in applied AI," said Hemant Taneja, chief executive of General Catalyst. "We are confident that this extension of our partnership will create significant long-term value and continue to drive Grammarly's ability to accelerate enterprise adoption." The company said it would use the massive fundraise to grow its customer base and extend the reach of its platform.

Grammarly has just secured a $1 billion commitment from General Catalyst

Grammarly, the 14-year-old writing assistant startup, has received a $1 billion commitment from General Catalyst to bolster its sales and marketing initiatives and facilitate strategic acquisitions. The funding will not dilute Grammarly's equity. General Catalyst's investment originates from its Customer Value Fund (CVF), which supports late-stage startups with reliable revenue streams. The CVF provides capital secured by a company's recurring revenue, acting as a form of lending. This financing structure allows companies such as Grammarly to avoid equity dilution and valuation resets. Grammarly's valuation reached $13 billion in 2021. However, an anonymous investor notes a significantly lower valuation in the current market. Grammarly will repay the capital along with a fixed, capped percentage of revenue generated from the use of General Catalyst's funds. In December, Grammarly acquired productivity startup Coda and appointed its CEO, Shishir Mehrotra, to lead Grammarly. The acquisition reflects Grammarly's shift toward becoming an AI productivity tool, which now has annual revenue exceeding $700 million. General Catalyst's Customer Value Fund has invested in nearly 50 companies, including insurtech Lemonade and telehealth platform Ro. CVF operates with separate limited partners and was not part of the firm's recent $8 billion capital raise.

Grammarly secures $1 billion from General Catalyst to build AI productivity platform

Grammarly has raised $1 billion in non-dilutive financing from General Catalyst to expand its artificial intelligence (AI) offerings, aiming to grow into a comprehensive productivity platform, the companies said on Thursday. Grammarly, known for its popular writing assistant tool, plans to use the capital to fund sales and marketing costs and strategic acquisitions. It looks to use AI to build more communication-based productivity tools and even hosts third-party tools on its platform by leveraging access to its 40 million daily users. The investment, one of the biggest out of General Catalyst's Customer Value Fund (CVF), could help late-stage tech companies like Grammarly accelerate growth by using dedicated capital to acquire new customers. By reallocating funds typically tied up in sales and marketing, Grammarly can invest more in product development. In return, General Catalyst doesn't receive an equity stake in Grammarly, but will get a capped return linked to revenue generated through using this capital. This is structured as a percentage of the revenue generated from the fund being used in customer acquisition. Founded in 2009, Grammarly has an annual revenue exceeding $700 million and is profitable. In December, Grammarly appointed Shishir Mehrotra, previously CEO of the acquired productivity platform Coda, as its new leader, signaling a push into broader AI-powered workplace tools. "As Grammarly is going through a huge transformation of going from being a what is mostly known as a single-purpose agent to being an agent platform, it just felt very important for us to be able to bet big in our product development and in M&A as well as in our growth strategies," Mehrotra said in an interview. He added said the company has an eventual goal to go public, although no imminent plans. "I'm right now just focused on making sure we're innovating with new products, growing as fast as we can. But when we feel ready, we'll go public," Mehrotra added. The dedicated growth investment, if it pays off, could also benefit the valuation of Grammarly and General Catalyst's stake in the company, as it has also been an equity investor in Grammarly's series B funding in 2017. San Francisco-based Grammarly has raised over $550 million in venture capital, according to PitchBook. It was last valued at $13 billion in 2021. General Catalyst's Customer Value Fund operates apart from the firm's main venture funds with separate limited partners, and is not included in the newly raised $8 billion fundraising the firm announced. This approach is part of a strategic evolution for the tech investor, led by CEO Hemant Taneja, as it seeks to grow beyond the traditional venture capital model, including creating innovative funding mechanisms. Its customer acquisition fund has invested in nearly 50 companies, including Lemonade and Fivetran, as it leads on growth metrics to a more predictable path to returns. "Companies like Grammarly basically have a machine where they can invest dollars in sales and marketing and generate a very consistent return," said Pranav Singhvi, Managing Director at General Catalyst, "With this wave of AI, giving Grammarly the firepower to actually go and invest could land those customers beyond the 40 million."

Grammarly Secures $1 Billion Financing Amid Evolution Into AI Productivity Platform | PYMNTS.com

Grammarly announced $1 billion in financing from General Catalyst's Customer Value Fund (CVF), saying it will use the financing for product innovation, scaling its sales and marketing, and making strategic acquisitions. The announcement came about five months after Grammarly acquired artificial intelligence productivity tool maker Coda, integrated the two companies and evolved into an AI productivity platform for apps and agents, the company said in a Thursday (May 29) press release. "With General Catalyst's continued partnership and confidence in our vision, we can scale faster and more sustainably to reach the millions of people who can benefit from our tools," Grammarly CEO Shishir Mehrotra said in the release. Grammarly's AI assistant helps users brainstorm, compose and enhance communication, according to the release. Its AI agents proofread, paraphrase and suggest tone. The AI assistant has more than 40 million users, and the company earns over $700 million in annual revenue, per the release. Pranav Singhvi, managing director and co-head of General Catalyst's CVF, said in the release that the investment is "a strategic enabler for the next phase of Grammarly's growth." "We've been working with the Grammarly team for years as they became an early leader in applied AI," Singhvi said. "We are confident that this extension of our partnership will create significant long-term value and continue to drive Grammarly's ability to accelerate enterprise adoption through transformed workflows and communication across industries." When Grammarly announced its intention to acquire Coda in December, it said in a press release that Mehrotra, who was Coda's CEO and co-founder, would become Grammarly's CEO and that the integration of the two companies would turn Grammarly into an AI productivity platform for apps and agents. "For the past 15 years, Grammarly has been building an AI superhighway with the capacity and expertise to do so much more than writing assistance for our customers," Grammarly co-founder Alex Shevchenko said in the December press release. "The acquisition of Coda is a big step toward achieving our vision of a world where humans and AI work together everywhere work happens." There's a growing number of AI tools designed to support enterprise writing, making content creation, editing and management more efficient, PYMNTS reported in November.

Grammarly secures $1 billion from General Catalyst for AI expansion - Reuters By Investing.com

Investing.com -- Grammarly, the company behind the well-known writing assistant tool, has secured $1 billion in non-dilutive financing from venture capital firm General Catalyst. The funding is set to be used for expanding its artificial intelligence (AI) offerings, with the goal of becoming a comprehensive productivity platform, as reported by Reuters, citing the companies. The funds will be directed towards sales and marketing costs and strategic acquisitions. Grammarly intends to leverage AI to develop more communication-based productivity tools and even host third-party tools on its platform, capitalizing on its access to 40 million daily users. This investment is among the largest from General Catalyst's Customer Value Fund (CVF). The CVF is designed to help late-stage tech companies like Grammarly accelerate growth by using dedicated capital to acquire new customers. As a result, Grammarly can reallocate funds typically used for sales and marketing towards product development. In this unique arrangement, General Catalyst will not receive an equity stake in Grammarly. Instead, the venture capital firm will get a capped return linked to revenue generated from the use of this capital. This return is structured as a percentage of the revenue generated from the fund being used in customer acquisition. The company also disclosed an eventual goal to go public, although it has not outlined any immediate plans for an initial public offering.

Exclusive-Grammarly secures $1 billion from General Catalyst to build AI productivity platform

Grammarly has raised $1 billion in non-dilutive financing from General Catalyst to expand its artificial intelligence (AI) offerings, aiming to grow into a comprehensive productivity platform, the companies told Reuters. Grammarly, known for its popular writing assistant tool, plans to use the capital to fund sales and marketing costs and strategic acquisitions. It looks to use AI to build more communication-based productivity tools and even hosts third-party tools on its platform by leveraging access to its 40 million daily users. The investment, one of the biggest out of General Catalyst's Customer Value Fund (CVF), could help late-stage tech companies like Grammarly accelerate growth by using dedicated capital to acquire new customers. By reallocating funds typically tied up in sales and marketing, Grammarly can invest more in product development. In return, General Catalyst doesn't receive an equity stake in Grammarly, but will get a capped return linked to revenue generated through using this capital. This is structured as a percentage of the revenue generated from the fund being used in customer acquisition. Founded in 2005, Grammarly has an annual revenue exceeding $700 million and is profitable. In December, Grammarly appointed Shishir Mehrotra, previously CEO of the acquired productivity platform Coda, as its new leader, signaling a push into broader AI-powered workplace tools. "As Grammarly is going through a huge transformation of going from being a what is mostly known as a single-purpose agent to being an agent platform, it just felt very important for us to be able to bet big in our product development and in M&A as well as in our growth strategies," Mehrotra said in an interview. He added said the company has an eventual goal to go public, although no imminent plans. "I'm right now just focused on making sure we're innovating with new products, growing as fast as we can. But when we feel ready, we'll go public," Mehrotra added. The dedicated growth investment, if it pays off, could also benefit the valuation of Grammarly and General Catalyst's stake in the company, as it has also been an equity investor in Grammarly's series B funding in 2017. San Francisco-based Grammarly has raised over $550 million in venture capital, according to PitchBook. It was last valued at $13 billion in 2021. General Catalyst's Customer Value Fund operates by drawing capital from the firm's main investment fund, including a newly raised $8 billion. This approach is part of a strategic evolution for the investment firm, led by CEO Hemant Taneja, as it seeks to grow beyond the traditional venture capital model, including creating innovative funding mechanisms. Its customer acquisition fund has invested in nearly 50 companies, including Lemonade and Fivetran, as it leads on growth metrics to a more predictable path to returns. "Companies like Grammarly basically have a machine where they can invest dollars in sales and marketing and generate a very consistent return," said Pranav Singhvi, Managing Director at General Catalyst, "With this wave of AI, giving Grammarly the firepower to actually go and invest could land those customers beyond the 40 million." (Reporting by Krystal Hu in New York; editing by Giles Elgood)

Grammarly secures $1 billion from General Catalyst to build AI productivity platform

(Reuters) -Grammarly has raised $1 billion in non-dilutive financing from General Catalyst to expand its artificial intelligence (AI) offerings, aiming to grow into a comprehensive productivity platform, the companies said on Thursday. Grammarly, known for its popular writing assistant tool, plans to use the capital to fund sales and marketing costs and strategic acquisitions. It looks to use AI to build more communication-based productivity tools and even hosts third-party tools on its platform by leveraging access to its 40 million daily users. The investment, one of the biggest out of General Catalyst's Customer Value Fund (CVF), could help late-stage tech companies like Grammarly accelerate growth by using dedicated capital to acquire new customers. By reallocating funds typically tied up in sales and marketing, Grammarly can invest more in product development. In return, General Catalyst doesn't receive an equity stake in Grammarly, but will get a capped return linked to revenue generated through using this capital. This is structured as a percentage of the revenue generated from the fund being used in customer acquisition. Founded in 2005, Grammarly has an annual revenue exceeding $700 million and is profitable. In December, Grammarly appointed Shishir Mehrotra, previously CEO of the acquired productivity platform Coda, as its new leader, signaling a push into broader AI-powered workplace tools. "As Grammarly is going through a huge transformation of going from being a what is mostly known as a single-purpose agent to being an agent platform, it just felt very important for us to be able to bet big in our product development and in M&A as well as in our growth strategies," Mehrotra said in an interview. He added said the company has an eventual goal to go public, although no imminent plans. "I'm right now just focused on making sure we're innovating with new products, growing as fast as we can. But when we feel ready, we'll go public," Mehrotra added. The dedicated growth investment, if it pays off, could also benefit the valuation of Grammarly and General Catalyst's stake in the company, as it has also been an equity investor in Grammarly's series B funding in 2017. San Francisco-based Grammarly has raised over $550 million in venture capital, according to PitchBook. It was last valued at $13 billion in 2021. General Catalyst's Customer Value Fund operates by drawing capital from the firm's main investment fund, including a newly raised $8 billion. This approach is part of a strategic evolution for the investment firm, led by CEO Hemant Taneja, as it seeks to grow beyond the traditional venture capital model, including creating innovative funding mechanisms. Its customer acquisition fund has invested in nearly 50 companies, including Lemonade and Fivetran, as it leads on growth metrics to a more predictable path to returns. "Companies like Grammarly basically have a machine where they can invest dollars in sales and marketing and generate a very consistent return," said Pranav Singhvi, Managing Director at General Catalyst, "With this wave of AI, giving Grammarly the firepower to actually go and invest could land those customers beyond the 40 million." (Reporting by Krystal Hu in New York; editing by Giles Elgood)