“We didn’t need external capital for development” — Grammarly on the new funding and Ukraine’s office
On November 18, the Ukrainian company Grammarly announced about raising $200+ million in investments. Previously, the company had already raised $200 million, having received unicorn status and a valuation of $2.3 billion. However, according to the results of the new round, the company’s valuation already amounted to $13 billion.
In Grammarly, the editor of AIN.UA was told why this round was needed, whether an IPO is being prepared, and how this will affect the Ukrainian staff of the company.
This round doubled the amount of capital previously raised by the company. Why such a sum? Does Grammarly really need so much money just to further develop its products and team?
Grammarly was founded in 2009 and adhered to a self-sustaining model until 2017. The company became profitable within a few years after its foundation and now remains so. We did not need external capital to support our operations and develop our business.
The new round will help us attract the best talent, accelerate team growth, and develop innovative solutions for Grammarly products. Also, new investors joined us this round (Baillie Gifford and funds and accounts managed by BlackRock), who make excellent financial partners. Their experience and expertise will help Grammarly on its way to new achievements and milestones.
How did you choose the funds, or did they come up with an offer themselves? How long did you negotiate? When did you actually close the deal?
The first stage of the round was closed on November 17th. The second phase is potentially expected in December.
Previous investors also joined the round, in particular General Catalyst. New investors (Baillie Gifford and the funds and accounts managed by BlackRock) are world-renowned companies with experience and expertise that are of great value to Grammarly.
What are the founders’ shares in Grammarly today?
The composition of Grammarly’s owners is wider than the one of founders and includes, in particular, Grammarly investors (Baillie Gifford, General Catalyst, Institutional Venture Partners, Spark Capital, as well as funds and accounts managed by BlackRock).
As a privately held company, we do not disclose details of the ownership and distribution of shares. It can be noted that the shares of Max Lytvyn and Alex Shevchenko (initial investors) differ from the share of Dmytro Lider, which is about 1%.
How many employees do you plan to hire? How big is the team in Ukraine, and how much will it grow?
Currently, Grammarly employs over 600 team members, more than 270 of them work in Ukraine, and the company continues to grow.
We plan to increase the team by 50% next year in Ukraine alone.
What kind of specialists are you looking for in Ukraine and what are you ready to offer them? Will you give them stock options?
Now we are looking for engineers (Front-End, Back-End, Security, ML, DevOps, MacOS, etc.), as well as professionals to join sales and user support teams, product and recruiting teams. All open positions are constantly updated on our website.
Our company adheres to a remote working model in a hybrid format: our colleagues can work remotely from any city in Ukraine and come to Kyiv for quarterly meetings with the team.
Grammarly offers a competitive compensation package that matches the market, industry, and positions for which we are hiring new colleagues. We respect the confidentiality of our team members and do not disclose information about the financial package, in particular options.
Grammarly has released a lot of new products in the last year. Which ones are generating the most revenue? How do your financial results grow from year to year?
Grammarly was founded in 2009 and adhered to a self-sustaining model until 2017. As a privately held company, we do not disclose other financial results.
Do you plan to go public? If so, what are your goals?
We consider raising investments as separate stages in our long journey. In the future, an IPO could be one of them. We will be ready to share our IPO plans at a convenient time.
Update data on user base activity. What is the percentage of paid subscriptions?
The number of daily active users (DAU) is 30 million people worldwide, including 30,000 business client teams. In the last year alone, the number of corporate clients of Grammarly with large contracts has grown by more than 250%. Among them are such leading brands as Zoom, Cisco, Expedia, and others.
How large is the market for Grammarly today? What are the main challenges you face?
Grammarly is committed to helping everyone who uses English in their personal and professional communication. Today, Grammarly helps create effective texts for applications and websites, totaling over 500,000. And we continue to work to expand our service coverage to support Grammarly users wherever they can communicate in English.
We’ve long focused on more than just basic writing mechanics like grammar, spelling, and punctuation. End-users are at the center of our business model — not advertisers or third parties. Our long-term vision is to create a comprehensive communication assistant that helps people understand each other better. There are still many tasks ahead of us on this path:
- We are working on complex aspects of communication and have implemented tips that help users express themselves clearly, understandably, and consistently. In our service, you can already choose the purpose of the message and see suggestions based on that purpose. Thanks to the tone detector, you can determine how the recipient will potentially perceive your message and, if necessary, make changes to it.
- With our new product, Windows and Mac desktop application, we have further expanded our communication support.
- We will also pay attention to the development of new partnerships — our partnership with Samsung was one of the first steps. And thanks to the launch of the Grammarly for Developers platform, we will be able to support even more clients exactly where they communicate in English. Access to the Grammarly API helps to create additional value for other services and applications and saves other businesses the time and resources that would go into developing their own technology solutions in the field of natural language processing.
- The priority area for the company remains the product for business clients — Grammarly Business. And we continue to work on developing new features to support business customers and their needs.
These are just a few of the natural language processing tasks that the Grammarly team will be working on in the future.
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