Grammarly Raises a Billion in Financing Tied to Revenue Growth

Known as much for its flagship write-assist offering as for ubiquitous advertising, the Grammarly Editor platform raised USD 1bn from General Catalyst‘s Customer Value Fund. The funds will operate like a loan or credit line with capped returns tied to revenue, rather than an equity stake.

The financing, announced on X on May 29, 2025, by the company’s current CEO, Shishir Mehrotra, is structured in a way that allows General Catalyst to increase their investment in Grammarly without diluting ownership by issuing new shares to other investors — according to Reuters.

The Reuters article also said the capital is intended to support and accelerate Grammarly’s growth through increased spending on sales, marketing, and strategic acquisitions. The investment is also expected to allow 16-year-old Grammarly to reallocate funds towards product development, particularly expanding its AI-driven offerings with communication-centric tools and integrated external applications, Reuters reported.

Mehrotra, who founded the AI collaborative platform Coda, said in an interview with Reuters that “Grammarly is going through a huge transformation… from being what is mostly known as a single-purpose agent to being an agent platform.” Coda completed a merger with Grammarly in January 2025.

“Grammarly is going through a huge transformation… from being what is mostly known as a single-purpose agent to being an agent platform.” — Shishir Mehrotra, CEO of Grammarly

This is not General Catalyst’s first show of faith in Grammarly. The firm led a USD 90m investment round in 2019 and likely propelled the Coda acquisition by being an investor in both companies.

Slator 2024 Language Industry M&A and Funding Report

This 55-page report provides an in-depth analysis of mergers, acquisitions, and funding in the language services industry in 2024.

$590BUY NOWIncluded in our Pro and Enterprise plan.
Subscribe now!

Reflecting on the deal, podcasters from “This Week in Startups” (TWIST) remarked that “SaaS is a difficult business and maybe [General Catalyst] thought ‘hey we could put these two companies together [and] have a stronger company.’ This will help increase the value of the company… so if they have some LPs [Limited Partners] who want to get a return on capital you get the double benefit — you’re loaning them money instead of having them take the money from a bank, so it’s all in the family.”

As a SaaS company, Grammarly faces potential headwinds, according to the TWIST podcast. The impact of AI tools, for example, could lead to a need for SaaS companies to re-evaluate pricing models, potentially moving away from per-seat to a consumption model, which historically has not been popular.

As of Q2 2025, Grammarly is a profitable at-scale business with an annualized revenue of more than USD 700m, supported by an individual user base estimated at 40 million and over 50,000 Grammarly Business accounts.

Mehrotra does not discount a future IPO: “I’m right now just focused on making sure we’re innovating with new products, growing as fast as we can. But when we feel ready, we’ll go public,” he told Reuters.

The investment underscores strong confidence in the company’s proven AI expertise and deep understanding of language, particularly given General Catalyst’s track record of backing companies with reliable revenue models (including the Viva Translate platform). 

According to PitchBook, Grammarly was valued at USD 13bn as far back as 2021.

Stoquart Buys Peer Belgian LSP ETC Europe

Stoquart, an language services provider based in Belgium, has acquired Brussels-based ETC Europe, which holds the status of being a translation agency accredited by the European Union and other governmental and international organizations.

The transaction was closed on 24 October 2024 after Stoquart's takeover of French competitor Version Internationale in 2023.

The founding managing director of Stoquart Translation Services, Dimitri Stoquart, found contact person ETC Europe General Manager Angelina Janssen due to meetings with the Belgian Association of Translation Companies or BQTA.

He stated that Janssen suggested Stoquart form a consortium with ETC Europe and another language service provider, VerbiVis, to respond to the European Commission's TRAD23 RFP. This resulted in Stoquart achieving second place for English-French translation.

In 2024, he mentioned that Janssen wanted to step back and suggested that Stoquart assume control of ETC Europe. Before the acquisition, shares of ETC Europe were divided among three shareholders; Stoquart has taken over all the shares.

"It was worth joining forces," Stoquart explained. "We have gained both institutional and private clients, along with an increasing number of multilingual projects."

In doing so, ETC Europe further creates new sources of income for Stoquart. The LSP, which now operates as ETC Europe or Stoquart, has recently entered three sizeable contracts with a number of Europe's biggest institutions.

This bodes well for Stoquart, which has faced an accumulated revenue decline of 30% in both 2023 and 2024.

"With this acquisition and the revenues from the European Parliament contract, we will be able to regain our 2022 revenue levels," Stoquart stated. 

Strong In-House Resources and Powerful Brands

Stoquart now has around 50 people working for her globally. Janssen will stay until the end of 2024 and will remain available as needed in the near future. (Besides nearly 30 in-house linguists, Stoquart engages between 150-180 freelancers monthly.)

Similar to Version Internationale, ETC Europe holds a strong reputation in the institutional sector. The company will retain its brand identity and limit integration with Stoquart to the essentials required for seamless operations, focusing primarily on activities in the LSP's main office.

Based on Stoquart's location, a big portion of its work is with all variants of French and Dutch, but the company also handles German, Italian, and Spanish. Stoquart now finds itself branching out into other European languages for institutional work, too.

Most clients are found in the US, Ireland, Czechia, Spain, France, Belgium, the UK, Germany, and Denmark. Stoquart said the LSP specializes in fields where human expertise is required, such as IT, finance, legal, life sciences, and the defense industry.

Stoquart's technology approach combines off-the-shelf tools, such as Studio and Phrase, and proprietary tools, including an app that allows users to access several machine translation engines. Stoquart is now expanding into additional European languages for institutional work as well.