Grammarly Ropes in $1 Billion from General Catalyst

Howdy folks! Well, looks like that ol’ writing wrangler Grammarly done lassoed a hefty $1 billion from the big guns over at General Catalyst. This 14-year-old startup plans to use all them funds to fuel its sales and marketing efforts, setting aside its own cash to round up some fresh companies for the corral.

The Deal is as Slick as a Cowboy's Bargain

Now, this ain't your usual cattle trade where General Catalyst gets a share of the ranch. Nope, instead, Grammarly will pay back the dough along with a fixed slice of the revenue pie they bake using this here investment. This is all thanks to General Catalyst’s Customer Value Fund, which specializes in rustlin' up capital for late-stage startups with regular cash flow to keep growin’ their operations.

Why This Setup Fits Like a Glove

For outfits like Grammarly, this kind of setup is mighty handy. It doesn't dilute the ownership or whip up a storm on the company’s worth. Last time folks checked, back in 2021, Grammarly's valuation was sittin’ pretty at $13 billion, but nowadays, given the market’s dance, that number has done moseyed down, according to a source close to the ranch.

Grammarly didn't tip their hat with a comment right away.

New Beginnings with Coda

Back in December, Grammarly roped in a productivity whiz, Coda, and handed the reins to Shishir Mehrotra as the new trail boss. This evolution into an AI-fueled productivity outfit rakes in over $700 million annually.

General Catalyst's Expansive Prairie

General Catalyst’s Customer Value Fund, which ain't part of the firm’s recent $8 billion raisin', has played guardian angel to near 50 other companies, including tech-savvy pioneers like Lemonade insurance and Ro, the telehealth trailblazer.

General Catalyst’s top buckaroo Hemant Taneja and Pranav Singhvi, co-chief of CVF, had a powwow with TechCrunch last fall, chewin' over this here special financing strategy in more detail.

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