Grammarly Gains $1B Growth Funding from General Catalyst
Grammarly, the AI-powered writing assistance platform, has secured a substantial $1 billion in non-dilutive funding from General Catalyst, according to a report by TechCrunch. The company plans to channel this capital primarily into sales and marketing while reserving its existing equity for strategic acquisitions.
Unlike traditional investments, this funding deal involves no exchange of equity. As stated in the report, “General Catalyst is not taking any shares; instead, Grammarly will return the capital using a portion of its predetermined revenue.”
The funding originates from General Catalyst’s Customer Value Fund (CVF), which supports established businesses aiming to scale sustainably. The fund structure is akin to revenue-based financing, offering capital with repayment tied to income rather than ownership.
Grammarly was valued at $13 billion in 2021. However, the company’s valuation has since declined amid shifting market conditions. Despite this, Grammarly currently generates over $700 million in annual revenue. In December 2024, it acquired productivity platform Coda and appointed its CEO, Shishir Mehrotra, as the new head of Grammarly.
