Artificial intelligence-based grammar and spell-checking tool Grammarly has closed a $90m funding round, taking the startup’s value to more than $1bn.
The funding round was led by venture capital firm General Catalyst, which holds stakes in internet companies such as Airbnb, Deliveroo, Snap Inc, Stripe and Canva.
This is the second round of funding closed by Grammarly, which raised $110m in May 2017. That funding round was also led by General Catalyst.
“We first invested in Grammarly to help them evolve into a platform that could improve written communication everywhere it happens,” General Catalyst managing director Hemant Teneja said. “The company’s ability to attract the talent needed to grow that platform continues to impress us, and today we’re excited to increase our investment to achieve their worthy mission.”
The free tool uses AI to analyse text and suggest changes to remove mistakes and improve the quality of writing. More than 20 million people currently make use of Grammarly daily.
Grammarly CEO Brad Hoover confirmed to TechCrunch that the startup has achieved unicorn status – a term used to refer to tech startups valued above $1bn – following the $90m funding round.
Grammarly turns attention to the enterprise
Grammarly will use the capital raised to continue to refine its technology to tackle more complex language and communication issues.
“Communication is a fundamental human need that helps us all connect and thrive,” Brad Hoover, CEO of Grammarly, said.
“But effective communication requires talent and time, and it can be very challenging. Grammarly’s AI fills this gap by empowering people worldwide – both native and non-native English writers, for personal, professional, and academic reasons – to communicate clearly and effectively.”
The company recently showed its intent to expand its product with the release of a tone detector, which provides insight into how others may interpret a message. The tool analyses word choice, phrasing, punctuation and capitalisation to determine tones such as friendly, formal, concerned and angry.
While Grammarly will continue to invest in its technology, the company is now focused on delivering tools for its enterprise customers.
Grammarly initially focused on the academic market, counting more than 300,000 university students from 250 universities among its customers in 2011. However, a statement released announcing the funding round stated that it “plans to accelerate product development that will support the needs of enterprise clients”.
According to Grammarly, more than 2,000 institutions and businesses are using its technology in the workplace.