Grammarly raises $90 million and says it's now a "unicorn"
Grammarly, the company behind the popular AI-powered writing assistant, has raised $90 million to provide more services for business writing. The company would not share its new valuation, but claims it's now a "unicorn" — a privately-held company worth over $1 billion.
Why it matters: That's a lot of money for an announcement without any new product launches, but Grammarly CEO Brad Hoover says the company doesn't face much competition, which could be attractive to investors.
"Ultimately, we're creating a new category for digital writing assistants."— Hoover
Details: The round is led by return investors General Catalyst and IVP. Grammarly did not disclose minority investors.
- This is the company's second raise. It raised $110 million in a 2017 round that was also led by General Catalyst and IVP, as well as Spark Capital.
- The company says it has 20 million daily active users on its various services, including users in more than 2,000 businesses and institutions.
How it works: Grammarly checks spelling and grammar for free, and paying users get more sophisticated suggestions about accuracy, precision, formality, and style.
Some of the new money will go toward more features for business users, Hoover says — but the company isn't launching any new enterprise products.
- It currently sells a "Grammarly for Business" subscription, which allows access to the tool for an entire business team, like a sales or customer support group.
- One coming feature will help writers follow corporate style guides, Hoover says. He wouldn't say what other changes are planned, beyond a push to "extend the availability of Grammarly within the enterprise."
Yes, but: The renewed focus on business stirs up privacy questions, because Grammarly has to have access to what users write to be able to offer suggestions.
- This is especially thorny for legal and health-related writing, which can be subject to HIPAA or attorney-client privilege. (Grammarly, for its part, is pitching its product for roles like HR, marketing and customer service.)
- Hoover says Grammarly prioritizes security, limits employee access to data, and "never would sell or rent data, including for advertising."