Once known simply as the world’s favourite grammar checker, the Ukrainian-born unicorn is now on a mission to reinvent how the world works. Grammarly, the trusted AI assistant for communication and productivity, has closed a $1 billion financing round from longtime investor General Catalyst. This is a non-dilutive financing deal, meaning Grammarly retains its ownership structure while gaining significant growth capital. This raise marks a new chapter for the San Francisco-based company, expanding from a writing enhancement tool to a full-fledged AI productivity platform, reshaping how work gets done across millions of apps, websites, and workflows.
The latest funding round comes from General Catalyst’s Customer Value Fund (CVF), a vehicle dedicated to accelerating the commercial scaling of its portfolio companies. The CVF model is unique: General Catalyst funds Grammarly’s sales and marketing expansion, and is repaid from the revenue generated by new customers—if the growth doesn’t materialise, General Catalyst absorbs the loss, not Grammarly.
General Catalyst’s involvement in Grammarly is part of the VC firm’s broader strategic push. With its $8 billion fund raised in October 2024, General Catalyst signalled its focus on sectors like AI, defence, fintech, healthcare, and climate tech. Grammarly’s growth into an AI productivity engine is the centrepiece of this strategy.
From Ukraine to a global AI pioneer
Grammarly began in 2009, founded by Ukrainian entrepreneurs Alex Shevchenko, Max Lytvyn, and Dmytro Lider. The trio had previously built MyDropBox, a plagiarism tool for universities, but wanted to go further and create a writing assistant that helped users communicate more clearly and confidently. Initially launched as an educational tool, Grammarly quickly gained popularity for its advanced grammar and writing suggestions.
The real breakthrough came when Grammarly pivoted to a freemium model and expanded beyond academia. By integrating with browsers, apps, and mobile devices, it became a go-to assistant for millions worldwide. Today, the platform serves over 40 million users and 50,000 organisations, offering real-time support across 500,000+ websites and apps.
Grammarly’s success is grounded in ethical AI, a strong privacy stance, and its mission to improve lives by improving communication. Now, with the acquisition of Coda, Grammarly is evolving into a full-scale AI productivity platform shaping the future of work.Following the acquisition, Coda’s former CEO, Shishir Mehrotra, became Grammarly’s CEO in December 2024, signalling a new era of leadership and strategic vision for the company.
Why does this matter?
Grammarly is no longer just fixing your typos. It’s becoming a backbone of how people work. The platform’s AI agents now actively assist in brainstorming, editing, tone modulation, and even detecting AI-generated content. These features are no longer limited to documents or emails. They’re embedded across enterprise software and consumer-facing apps alike.
With Coda’s integration, Grammarly offers a powerful suite that understands team knowledge, structures information intelligently, and proactively delivers insights. Coda Brain, the AI at the core of Coda Docs, offers enterprise-grade, permission-aware connections to company data, turning static documents into dynamic, continuously updating workflows. Paired with Grammarly’s AI agents, Coda Docs serve as collaborative, responsive workspaces where teams can ideate, plan, and execute with minimal friction.
This places Grammarly among a new generation of AI-native platforms that don’t just offer tools but build intelligent systems that understand and anticipate user needs. It’s a shift from productivity software to productivity infrastructure. The company is also planning to open its platform to third-party tools, aiming to become the foundational ecosystem for AI-powered productivity.
Market position and future strategy
Grammarly’s unique positioning at the intersection of communication, AI, and enterprise collaboration gives it a distinct advantage. With customers like Atlassian, Databricks, and Zoom, it is already embedded into some of the world’s most innovative organisations. Grammarly boasts over $700 million in annual revenue and remains profitable, with impressive 80% gross margins and a 97% annual retention rate among paid users.
The capital will enable the company to double down on its growth efforts. This includes:
- Scaling sales and marketing to bring Grammarly to more teams, sectors, and geographies.
- Strategic acquisitions that expand product offerings, improve integrations, or enhance AI capabilities.
- Product innovation, continuing to build AI agents that work seamlessly across environments, from emails and slides to internal wikis and CRM systems.
AI’s dominance in venture funding
Grammarly’s raise is part of a broader trend: AI continues to dominate global venture funding. In Q1 2025 alone, $59.6 billion was invested in AI startups globally, over half of all venture capital raised during the quarter. Late-stage deals like Grammarly’s accounted for 61% of AI funding activity.
This surge reflects a growing consensus among investors: AI is not just a vertical, but a cross-cutting enabler reshaping every industry. From healthcare to education, finance to customer support, AI platforms like Grammarly are paving the way for a future where intelligent agents assist in every facet of work.
Unleashes a new era of work
Grammarly’s raise is part of a broader trend: AI continues to dominate global venture funding. In Q1 2025 alone, $59.6 billion was invested in AI startups globally, over half of all venture capital raised during the quarter. Late-stage deals like Grammarly’s accounted for 61% of AI funding activity. This surge comes even as Grammarly faces competition from generative AI platforms like ChatGPT and Microsoft Copilot, which have slowed its growth but not diminished its market leadership.
No longer just a tool for correcting mistakes, Grammarly is building the infrastructure of intelligent productivity software. Think beyond writing help. Its AI now acts like a thoughtful colleague, one that understands context, aligns with your goals, and helps you get there faster. Grammarly is positioning itself at the core of tomorrow’s work environment. Grammarly’s raise is part of a broader trend: AI continues to dominate global venture funding. In Q1 2025 alone, $59.6 billion was invested in AI startups globally, over half of all venture capital raised during the quarter. Late-stage deals like Grammarly’s accounted for 61% of AI funding activity.
As AI continues to reshape industries, Grammarly’s evolution is a powerful example of how Ukrainian innovation is influencing the global future of work, making it smarter, more connected, and effortlessly efficient. Grammarly’s valuation has grown from $1 billion in 2019 to $13 billion in 2021, and this latest funding round preserves that high valuation while fueling further expansion.
“Integrating Coda and Grammarly has unlocked tremendous potential for how people work and communicate,” said Shishir Mehrotra, Grammarly CEO. “I’m energised 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. The breadth of what we can now offer is truly compelling. 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.”
“This investment represents more than just capital; we believe it’s a strategic enabler for the next phase of Grammarly’s growth,” said Pranav Singhvi, Managing Director and Co-Head of the CVF.
“We’ve been working with the Grammarly team for years as they became an early leader in applied AI. 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,” said Hemant Taneja, CEO of General Catalyst.