Grammarly has been quietly building a freemium grammar checker to help students, writers and people who want to make a good impression on social media or email. Now they’re raising $110 million from General Catalyst, IVP and Spark Capital to take their business to the next level.
This is the first venture round for the eight-year-old startup. Investors are betting big because Grammarly has already shown itself to be profitable.
It’s “growing faster than anything we normally see in San Francisco,” said Jules Maltz, general partner at IVP. “We expect this to be a meaningful company in the years to come.”
Grammarly has 6.9 million daily active users, most of whom use the service for free. The startup makes money on the users who pay $11.99 per month for help with sentence structure and vocabulary.
There are an array of spell checkers, but Grammarly hopes to convince customers that its offerings are better than what you’d find with Google or Microsoft. It also has a Chrome extension that enables it to proofread online documents.
Grammarly is “using artificial intelligence to help people with the substance and content of what they write,” said CEO Brad Hoover. He plans to use the funding to hire more staff and improve the algorithm.
Hoover used to be on the investment team at General Catalyst. After coming across Grammarly, he saw an opportunity to grow the Ukraine-founded business.
Jeremy Philips, a general partner at Spark Capital, said they invested because they “love the product and the mission of improving the way people communicate.”