Grammarly, the popular AI-powered writing assistant, has secured a $1 billion commitment from global investment firm General Catalyst to accelerate its growth and global expansion. The strategic funding will support Grammarly’s sales and marketing efforts, allowing the company to reserve its existing capital for acquisitions and product development.
Notably, this is not a traditional equity investment. Instead of giving up ownership in exchange for funding, Grammarly will repay General Catalyst from future revenue generated through the use of these funds, along with a capped return. This revenue-based financing approach helps Grammarly maintain its valuation and avoid equity dilution, a smart move in a market where startup valuations have faced downward pressure.
The capital comes from General Catalyst’s Customer Value Fund (CVF), which offers alternative financing to mature, revenue-generating companies. CVF backs businesses with stable cash flows, offering capital in exchange for a percentage of future revenue rather than equity. This model is especially appealing in today’s economic environment, where companies are seeking flexible funding without impacting control or ownership.
Grammarly, founded in 2009, has grown to become a global brand, with a user base spanning millions across the world, including India. With annual revenues exceeding $700 million, the company continues to expand beyond grammar correction, evolving into a comprehensive AI productivity platform.
Last year, Grammarly acquired productivity software company Coda and brought in its CEO, Shishir Mehrotra, to lead Grammarly into its next phase of growth. The move signals Grammarly’s ambition to go beyond writing assistance and become a key player in AI-driven workplace tools.
General Catalyst’s CVF fund has previously backed nearly 50 high-growth startups, including well-known names in insurtech and digital health. The Grammarly commitment further reinforces its confidence in AI-driven platforms with strong user adoption and global scalability.
This development could also signal new opportunities for Grammarly’s expansion into emerging markets like India, where demand for AI writing and productivity tools continues to rise across education, business, and content creation sectors.
