Grammarly’s new funding from venture capitalist General Catalyst shows how the AI writing vendor has proven itself in the eyes of investors and customers, and provides an avenue for expansion.
The San Francisco-based vendor unveiled that it has secured $1 billion in non-dilutive financing from General Catalyst, which will be used to grow from an AI writing tool into a productivity platform. Non-dilutive funding means Grammarly does not have to give up equity in exchange for the financing.
This is the largest investment Grammarly has received to date. The funding came from General Catalyst’s Customer Value Fund, which is known for investing in companies whose revenue streams are predictive. This is also not the first time General Catalyst has invested in Grammarly; its initial investment was in 2017, when it led a $90 million investment round. The financing comes as generative AI continues to interest investors and grow in hype. For example, earlier this week, Salesforce acquired data management vendor Informatica for $8 billion. The Salesforce deal will establish a unified architecture for agentic AI, which is a form of GenAI.
Confidence in Grammarly
The large amount that General Catalyst is investing shows it is confident in Grammarly’s ability to generate a large ROI, according to Nick Patience, an analyst at The Futurum Group.
Grammarly’s confidence is well-founded. As of 2025, the vendor has about 30 to 40 million daily users, with more than 50,000 teams using Grammarly Business worldwide. Informa TechTarget is one of those customers.
“That’s quite a lot of people,” Patience said. “They were one of the original companies doing this kind of thing, using text analysis and generating content.”
☒ Pull quote: Grammarly has captured that intersection point of language and AI.
Liz MillerAnalyst, Constellation Research
Since its founding in 2009, Grammarly has grown from a grammatical check tool to an AI productivity tool for all aspects of writing. It competes with other writing tools, such as Linguix and Writer.
“Grammarly has captured that intersection point of language and AI,” said Liz Miller, an analyst at Constellation Research. “When you think about all the things propelling top of mind, some might say hype cycle moments — it’s really around AI and the capacity to capitalize on language, truly.”
She added that Grammarly has become a tool that helps users apply their understanding and knowledge to language to transform communication.
“How does this inform all of the other AI projects that we’re trying to work on, or all of the other fine-tuning or algorithmic issues that we’re working on,” she continued. “That’s where Grammarly has been quietly yet quickly moving forward with what they’ve been able to develop.”
Shifting its business model
With the $1 billion in funding, Grammarly reportedly plans to build more communications-based tools and host third-party tools on its platform.
“They’re trying to broaden out their portfolio,” Patience said, adding that Grammarly is aiming to transition from being a writing assistant to a communications platform.
Grammarly’s success in shifting its business model will depend on how it makes the move, Miller said. She added that Grammarly was initially an individually driven go-to-market tool. Customers might start using the tool for something minor, such as a Facebook post, and then later apply the tool to longer pieces. This has helped build trust in the technology and the vendor.
“They can make that pivot into being a language platform powered by AI that can then be plugged into any number of different scenarios,” Miller said. “It’s going to be a matter of staying true to their roots.”
This investment is an opportunity for Grammarly to think bigger, expand its reach and find opportunities to be part of the human-to-AI, human-to-device, human-to-human, device-to-device and AI-to-AI communication interface, Miller continued. But she added that Grammarly must clearly articulate its use cases and how they affect the customers who trust it. “That’s where, ‘OK, now you’re servicing this type of communication optimization,'” she said. “Now, you’re servicing language in a very different spot.”
Esther Shittu is an Informa TechTarget news writer and podcast host covering AI software and systems.
