What is the value of proper writing skills? Grammarly has a precise answer: $13 billion. This now famous Ukrainian-born startup has just raised more than $200 million in Silicon Valley at this astounding valuation. The funding was provided by Baillie Gifford, an Edinburgh-based investment firm, and funds and accounts managed by BlackRock, among others.
Grammarly was founded in 2009 by Kyiv natives Aleksey Shevchenko and Maksim Litvin. Its AI-powered software helps people improve writing, monitoring errors in grammar and syntax, as well as incorrect speech constructions in real time.
Grammarly’s solution will explain why an expression should be avoided, and recommend a more correct version. The program can also check the text for plagiarism, and suggests the right tone to use depending on who will be doing the reading.
The company claims its algorithms have been “developed by the world’s leading authorities on linguistic technology.” A variety of innovative approaches are used, including advanced machine learning and deep learning, which has earned the startup recognition as “one of the world’s most innovative AI companies.“
Investing in security, compliance and user trust
Grammarly’s valuation has increased 13 times since its last round of funding in October 2019, when it secured $90 million from General Catalyst, IVP and other investors.
This funding has been used, in particular, to enhance Grammarly’s security and compliance: “We’ve doubled down on our investments in security so our customers can rest assured their data is safe and secure. We’ve achieved new enterprise-grade security milestones, including a SOC 2 (Type 2) report, ISO 27001/17/18 certifications, and HIPAA compliance,” according to a corporate statement.
The latest capital injection will allow Grammarly to investing more in its AI technology. Rahul Roy-Chowdhury, Grammarly’s global head of product, told TechCrunch about developing further natural language processing and machine learning tech “to deliver personalized communication feedback to its users.” Grammarly will also aim to earn and strengthen user trust, he said.
The company will also release a new desktop application across two operating systems (Grammarly for Windows and Grammarly for Mac). “This is a big step toward breaking down technological barriers and achieving effective communication where important writing happens. With one easy installation, our writing suggestions will now work across more desktop and web applications than ever before.”
Since launching its freemium product in January 2015, the company has grown to over 30 million daily active users. It claims to be “a profitable company that has been cash-flow positive since [its] very early days,” with a business model that “puts users first,” making money from subscriptions, not from selling data or ads.
The startup has no imminent plans to go public, Chief Executive Officer Brad Hoover told Reuters in an interview.