Grammarly, an AI-driven communication platform known for writing tools, raised $1 billion in non-dilutive funding from General Catalyst. The venture capital firm announced the deal on May 29, 2025, marking a major investment in AI productivity technology.
This funding will help Grammarly evolve into an enterprise-level platform with expanded AI features for collaboration and workflow enhancement. With over 40 million daily users, Grammarly is positioned to lead the future of AI-powered workplace communication and productivity solutions.
From Writing Assistant to Enterprise AI Platform
Reuters reports that Grammarly has raised $1 billion in non-dilutive funding from General Catalyst’s Customer Value Fund (CVF), making it one of the fund’s largest investments to date. The investment is intended to expedite Grammarly’s transition from a writing helper to a full-fledged AI-driven productivity platform that supports both individual and enterprise customers.
This funding will mainly support Grammarly’s efforts to expand sales, enhance marketing, and pursue strategic acquisitions for accelerated growth. It will also let Grammarly redirect internal resources toward advancing product innovation and strengthening its core AI capabilities. General Catalyst will receive no equity in return, preserving Grammarly’s ownership structure and avoiding any change in company valuation.
Instead, Grammarly will repay a capped percentage of revenue generated through capital use, especially from acquiring new customers. This model allows late-stage companies to scale efficiently without diluting ownership or altering long-term valuation metrics.
Founded in 2009, Grammarly now generates over $700 million in annual revenue and runs its operations with financial efficiency. The platform serves more than 40 million daily users and 50,000 organizations with advanced AI-powered communication tools. Grammarly’s features include grammar correction, tone suggestions, deep text analysis, and paraphrasing to enhance clarity and effectiveness in writing.
Commenting on the investment, Shishir Mehrotra said,
As Grammarly is going through a huge transformation of going from being a 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. I’m right now just focused on making sure we’re innovating with new products, growing as fast as we can. But when we feel ready, we’ll go public.
Grammarly’s platform now supports over 500,000 apps and websites, helping users draft and refine content with AI-powered accuracy. It offers tailored solutions like Grammarly Free for casual users and Grammarly Pro for professionals needing advanced writing support. Grammarly for Education serves academic institutions, while Grammarly Enterprise helps businesses enforce brand voice and boost team communication. These tools improve productivity by delivering consistent, high-quality communication across various writing contexts and organizational needs.
Grammarly AI Funding Marks Major Milestone in Tech Investment
The CVF investment approach marks a broader strategic shift for General Catalyst, led by CEO Hemant Taneja, toward scalable funding. CVF operates separately from General Catalyst’s core venture funds, with distinct limited partners and a focus on revenue-backed growth investments. This model supports expansion without ownership dilution, aligning with the firm’s goal to move beyond traditional venture capital structures. To date, General Catalyst has used this strategy to fund around 50 companies, including notable firms like Lemonade and Fivetran. Pranav Singhvi, Managing Director at General Catalyst,
Companies like Grammarly basically have a machine where they can invest dollars in sales and marketing and generate a very consistent return. With this wave of AI, giving Grammarly the firepower to go and invest could land those customers beyond the 40 million.
General Catalyst has supported Grammarly for years, first investing during the company’s Series B funding round in 2017. Grammarly reached a $13 billion valuation at the market’s peak in 2021, reflecting strong investor interest and momentum. Although valuations have since adjusted, this new partnership shows continued confidence in Grammarly’s leadership in applied workplace AI. Investors view Grammarly as a key player in driving the next phase of AI-powered productivity and communication solutions.
As Grammarly expands its solutions and deepens its AI capabilities, it places itself at the nexus of communication and productivity, enabling users across industries to communicate with clarity, consistency, and intelligence.
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