Grammarly, the San Francisco-based AI-powered writing and productivity assistant, has raised a staggering $1 billion in non-dilutive financing from longtime investor General Catalyst. This significant capital injection, announced on May 29, 2025, aims to fuel the company’s expansion into a comprehensive AI productivity platform.
The funding, structured as revenue-based financing, allows Grammarly to retain full equity while repaying the investment through a fixed percentage of its revenue. This approach underscores the company’s strong financial health, with reports indicating over $700 million in annual revenue and consistent profitability since its founding in 2009.
With this investment, Grammarly plans to accelerate customer growth, enhance its AI capabilities, and explore strategic acquisitions. The company is eyeing deeper integration of artificial intelligence to transform how individuals and businesses communicate and work efficiently.
Grammarly’s evolution into a broader productivity tool is evident with recent moves, including the acquisition of Coda and the appointment of Shishir Mehrotra as CEO. These steps signal the company’s ambition to redefine workplace productivity on a global scale.
This funding also positions Grammarly as a leader in the AI-driven tech landscape, especially as it gears up for potential IPO plans in the near future. Industry experts view this as a pivotal moment for the Ukrainian-founded unicorn, now valued at over $13 billion from previous funding rounds.
As Grammarly continues to innovate, this $1 billion commitment from General Catalyst highlights strong investor confidence in the future of AI-powered solutions for communication and productivity. The tech world is watching closely as Grammarly charts its next chapter.
Alfred Lee
