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Grammarly raises $200M at a $13B valuation to make you an even better writer using AI

·4-min read

Grammarly, the popular auto-editing tool for writing, has raised $200 million in funding at a $13 billion valuation from new investors including Baillie Gifford and funds and accounts managed by BlackRock, among others. The company plans to use the investment to accelerate product innovation and team growth.

"We believe this funding round is a great validation of our business strength," Rahul Roy-Chowdhury, Grammarly's global head of product, told TechCrunch in an interview. "We've been cash flow positive from the very early days. The round also validates the strength of our mission to improve lives through improving communication. This funding round comes in the context of product innovation and product scaling."

Roy-Chowdhury says Grammarly plans to use the funding to continue making investments in its AI technology. The company will also continue to advance its natural language processing and machine learning tech to deliver personalized communication feedback to its users. Roy-Chowdhury also noted that Grammarly plans to make additional investments to earn and strengthen user trust.

"Looking ahead, I see so much potential because, at the end of the day, it always comes back to our mission of improving communication. There's so much change in how work gets done with remote-first global teams trying to work together. We see a huge opportunity to help people with these changing scenarios communicate more effectively. This new funding is only going to help us accelerate our efforts to do that," he said.

As for the company's vision for the future of the service, Roy-Chowdhury noted that Grammarly will move past simply focusing on conciseness, consistency and correctness. The company plans to add new categories in which to offer suggested improvements, while also working to become more ubiquitous.

Grammarly is already scaling its product offerings and achieving its goal toward ubiquity with the launch of Grammarly for Mac and Windows earlier this week. The new desktop application can be used on apps such as Microsoft Office, Slack, Discord, Jira and more. Roy-Chowdhury says the new desktop app aims to be users' go-to writing tool wherever they type, as the service is now able to break out of technical barriers associated with browser extensions.

Image Credits: Grammarly

"With Grammarly for Mac and Windows, we can now tie everything together and help you with the entirety of your communication flow. With this, we are present everywhere you communicate and can help you achieve your outcomes more effectively," Roy-Chowdhury stated.

Grammarly also recently announced the launch of Grammarly for Developers with the rollout of its Text Editor SDK (software development kit), which enables programmers to embed Grammarly text editing functionality into any web application. The beta release of this SDK gives developers access to the full power of Grammarly automated editing with a couple of lines of code. Although users of the target application don’t need to be Grammarly customers, if they do happen to be, they can log into their Grammarly accounts and access all of the functionality that comes with that.

The company's latest funding round follows Grammarly's previous one in October 2019, when it raised $90 million at a valuation of over $1 billion. This round was led by General Catalyst, which had also helped lead its only other round, for $110 million in May 2017, with participation from previous investor IVP and other unnamed backers.

Today, Grammarly works across more than 500,000 applications and websites including email clients, enterprise software and word processors. The company says as more people are connecting across more online platforms, it's important to get communication right in order to achieve individual and business goals, which is what it aims to help its users accomplish.

"As the world has digitized, people communicate more than they ever have — yet it has never been so difficult,” said Peter Singlehurst, head of private companies at Baillie Gifford, in a statement. “Grammarly is one of the few businesses in the world focused on solving this problem. What attracted us is the company’s vision and the team’s ability to drive the product forward to help more people in more situations communicate better. Grammarly’s long-term and ambitious approach also aligns with our approach to investing."

Grammarly operates on a freemium model, where paid tiers give users more tools beyond grammar and spelling checks to include things like word choice, sentence rewrites, tone adjustments, fluency, formality level and plagiarism detection. The paid tiers are priced at $12, $20 and $30 per month.

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