Grammarly has secured a $ 1 billion commitment by General Catalyst. The 14 -year start of the writing assistant will use the new chapters for sales and marketing efforts, releasing the existing capital to make strategic acquisitions.
Unlike a traditional round of business, General Catalyst will not receive a share capital in the company in return for investment. Instead, Grammarly will return the capital along with a fixed, covered percentage of revenue it generates from the use of General Cataly’s capital.
The investment comes from the General Catalyst (CVF) customer fund (CVF), a group of funds that helps newly established businesses with predictable revenue flows to develop new funding specifically for the development of their businesses. CVF’s alternative funding strategy essentially “gives” funds secured by a company’s repetitive revenue.
For companies such as Grammarly, this form of funding is beneficial because it is non -exhaustive and does not restore the company’s valuation. Grammarly was valued at $ 13 billion in 2021 during the Zirp era (zero interest rate policy). However, the company’s valuation in today’s market is significantly lower, according to an investor in the company that requested to remain anonymous.
Grammarly did not respond immediately to a request for comments.
In December, grammar productivity Coda boot And he appointed his chief executive, Shishir Mehrotra, to drive Grammarly. The company, which is evolving into a AI productivity tool has annual revenue over 700 million $.
General Catalyst’s Customer Value Fund gave funding Nearly 50 companiesIncluding InsurTech Lemonade and the Telehealth Ro platform. The CVF maintains its own separate limited partners and has not been included in the recent $ 8 billion capital increase in the company.
The head of General Catalyst Honcho Hemant Taneja and Pranav Singhvi, co-head of CVF, spoke with TechCrunch longer about the Group’s specialized funding strategy last fall.
