Grammarly Secures $1 Billion in Non-Dilutive Funding from General Catalyst to Expand AI Productivity Platform

Grammarly has obtained a $1 billion non-dilutive investment from General Catalyst’s Customer Value Fund (CVF), aiming to accelerate its transformation into a comprehensive AI-driven productivity platform.

Key Highlights:

• Non-Dilutive Financing Structure: Unlike traditional equity financing, this investment does not grant General Catalyst an ownership stake. Instead, Grammarly will repay the capital with a capped percentage of revenue generated from the use of these funds. This approach allows Grammarly to maintain its valuation and ownership structure.
• Strategic Utilization of Funds: The capital will be directed towards sales, marketing, strategic acquisitions, and product development. By reallocating resources typically tied up in customer acquisition, Grammarly can invest more in expanding its AI capabilities and integrating third-party tools.
• Leadership and Vision: Following the acquisition of productivity startup Coda in December 2024, former Coda CEO Shishir Mehrotra was appointed as Grammarly’s new head. Under his leadership, the company is focusing on evolving from a single-purpose writing assistant to a broader AI-powered workplace tool.
• Financial Health: Grammarly is profitable, with annual revenues exceeding $700 million. The company was last valued at $13 billion in 2021 and has raised over $550 million in venture capital to date.

This significant investment underscores Grammarly’s commitment to expanding its role in the AI productivity space, leveraging its substantial user base and financial strength to drive innovation and growth.

For more details, read the full article on TechCrunch: Grammarly secures $1B in nondilutive funding from General Catalyst.