San Francisco-based Grammarly is making a bold strategic pivot with a massive $1 billion capital infusion from General Catalyst's Customer Value Fund, announced on May 29, 2025.
The financing, structured as non-dilutive capital, represents one of General Catalyst's largest investments from its specialized fund. Rather than taking an equity stake, General Catalyst will receive a capped return linked to revenue generated through the capital deployment, primarily in customer acquisition efforts.
"As Grammarly is going through a huge transformation of going from being what is mostly known as a single-purpose agent to being an agent platform, it just felt very important for us to be able to bet big in our product development and in M&A as well as in our growth strategies," said CEO Shishir Mehrotra, who took the helm in January following Grammarly's acquisition of productivity platform Coda.
The company, founded in 2009 and profitable with annual revenue exceeding $700 million, plans to leverage its extensive reach across 500,000 applications and websites to build more communication-based productivity tools. A key part of this strategy involves hosting third-party tools on its platform, utilizing access to its 40 million daily users.
This transformation began taking shape with the Coda acquisition, which brought powerful document collaboration tools and Coda Brain, an AI document chatbot platform that can access enterprise knowledge systems. The combined entity aims to redefine workplace productivity by integrating AI agents that function alongside users, recognizing context and helping people accomplish more with less effort.
"With this wave of AI, giving Grammarly the firepower to actually go and invest could land those customers beyond the 40 million," noted Pranav Singhvi, Managing Director at General Catalyst, highlighting the growth potential for a company last valued at $13 billion in 2021.