AI writing assistant Grammarly announced on May 30 that it has obtained $1 billion in funding from General Catalyst’s Customer Value Fund (CVF). The company stated it would make use of the funds for product innovation, scaling its sales and marketing, and making strategic acquisitions.
Grammarly also revealed that it had plans to expand its AI offerings and develop a “comprehensive productivity platform,” according to a Reuters report.
“Grammarly is going through a huge transformation…from being what is mostly known as a single-purpose agent to being an agent platform,” CEO Shishir Mehrotra said. This comes five months after Grammarly acquired artificial intelligence productivity tool maker Coda, integrating it with itself to evolve into an AI productivity platform for apps and agents.
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Grammarly’s AI assistants help users brainstorm, compose and enhance communication. Its AI agents proofread, paraphrase and suggest tone. The assistant has more than 40 million users, and the company earns over $700 million in annual revenue, according to a media release.
Pranav Singhvi, managing director and co-head of General Catalyst’s CVF stated “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.”
Mehrotra was also the former CEO of Coda, and was appointed as Grammarly’s CEO in December 2024 as part of the company’s broader shift in focus towards AI. Mehrotra said it was important for the company to bet big on product development and growth strategies as it transforms from being a single-purpose agent to an agent platform.
Mehrotra also stated that while the company has plans to go public, there are no immediate plans for it. He emphasized the focus on innovation with new products and growth.