Grammarly reportedly secures $1 billion from General Catalyst for AI expansion
Grammarly, a digital writing tool, has secured $1 billion in non-dilutive financing from General Catalyst, with plans to expand its artificial intelligence (AI) offerings, according to a Reuters report on Thursday, News.az reports citing Investing.
The aim is to evolve into a comprehensive productivity platform.
This investment is one of the largest from General Catalyst’s Customer Value Fund (CVF) and is expected to boost growth for late-stage tech companies like Grammarly. The funding will allow Grammarly to acquire new customers by reallocating money usually reserved for sales and marketing towards product development.
In this unique arrangement, General Catalyst will not receive an equity stake in Grammarly. Instead, the firm will get a capped return linked to the revenue generated through the use of this capital. This return is structured as a percentage of the revenue produced from the fund being utilized in customer acquisition.
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