Grammarly is free, so how does Grammarly make money?
So, here I have done a detailed analysis of different revenue sources, as well as the many products and services, Grammarly business model, year-over-year revenue, and how Grammarly operates.
What Exactly Is Grammarly, And How Does It Work?
Grammarly is a writing assistant software that uses artificial intelligence to autocorrect mistakes and integrates as an extension with your browser or PC (app).
Grammarly, developed in 2009 by Alex Shevchenko and Max Lytvyn, has over 30 million daily active users as of 2020.
Evernote, Slack, DocuSign, Notion, Trello, and other productivity tools are among Grammarly’s competitors.
How Does Grammarly Make Money?
How does Grammarly make money?, Grammarly has over 30 million daily active users and over 2,000 institutional and enterprise clients.
Although Grammarly provides a free version of their browser extension known as the “freemium” version, they also provide premium upgrades to individuals seeking more from the writing assistance tool than simply the fundamentals such as spelling, grammar, and punctuation correction.
What Are Grammarly’s Different Ways To Make Money?
Grammarly’s revenue model generates revenue in three ways
1. Subscriptions
Grammarly Premium and Grammarly Business are the two premium versions of the writing help program.
These upgrades contain everything available in the freemium edition, as well as checks for fluency, readability, word choice, plagiarism detection, inclusive language, formality level, and more.
Grammarly Premium
- 3–9 seats: $180 USD per seat annually / $15 USD average cost per month
- 10–49 seats: $174 USD per seat annually / $14.50 USD average cost per month
- 50–149 seats: $150 USD per seat annually / $12.50 USD average cost per month
Grammarly Business
- 3—9 seats: $180 USD per seat annually / $15 USD average cost per month
- 10—49 seats: $174 USD per seat annually / $14.50 USD average cost per month
- 50—149 seats: $150 USD per seat annually / $12.50 USD average cost per month
2. College And University Software Licensing
Grammarly now licenses its unique writing assistance service, Grammarly @edu, to educational institutions.
The institution licenses Grammarly software for a charge (numbers not disclosed by Grammarly).
In exchange, students at that college or university receive full access to Grammarly Premium paid version for free.
Grammarly now licenses its unique writing assistance service, Grammarly @edu, to educational institutions.
The institution licenses Grammarly software for a charge (numbers not disclosed by Grammarly).
In exchange, students at that college or university receive full access to Grammarly Premium paid version for free.
Grammarly @edu pricing plans:
- 5 Users: $500 per year
- 10 Users: $800 per year
- 20 Users: $1,200 per year
- 20+ Users: get a quote
Grammarly’s major source of revenue before developing and releasing a browser extension with a paid tier was licensing its software to colleges and universities.
Grammarly had worked with over 250 educational institutions and over 100,000 students by 2014.
Today, they have licensed the tool to over 1,000 universities globally.
Among them are Iowa State University, Clemson University, Chapman University, the University of Utah, the University of Illinois, and others.
3. Grammarly expert writing service
Grammarly’s an expert writing service help is exclusively available to Grammarly Premium subscribers, which is a creative method to upsell premium subscribers and a wonderful selling point for freemium subscribers.
This service assists people who require additional assistance with proofreading any missed errors.
The process is as follows:
- The Premium user selects the service and turnaround time they want Grammarly’s writing expert to perform
- Places the order
- Waiting for the email confirmation after it’s completed
Expert writing service cost:
- Correctness only: $0.019 – $0.149 per word (based on turnaround time)
- Correctness and Clarity: unknown
Grammarly Profit And Revenue
Grammarly has Subscriptions, software licensing to institutions, and expert writing services are the three (3) revenue sources. How much do they earn in a fiscal year?
Grammarly stated in a 2014 press release that they were 55th on Deloitte’s Technology Fast 500 list of the top 500 fastest-growing tech firms, with a 2,326 percent revenue growth from 2009 to 2013.
Grammarly Business And Revenue Model?
Grammarly is largely known as a writing assistance and plagiarism detector available on various platforms.
It operates on a subscription-based freemium software-as-a-service (SAAS) business model.
Grammarly generates revenue using a number of revenue methods that they integrate within their firm. These are:
- Freemium business model
- Software as a service (Saas) business model
- Software licensing business model
In 2015, Grammarly released a free browser extension version. In just 5 years, their daily active users (DAU) have climbed from 1 million to more than 30 million.
The Key Takeaways On Grammarly Business & Revenue Models
- Grammarly has a clear vision to create a communication assistant that offers significant benefits to its users by fostering professional growth. The core values of Grammarly can be neatly encapsulated in the “EAGER” framework.
- The business model of Grammarly demonstrates the effectiveness of the freemium approach in supporting the long-term expansion of a company. However, it should be noted that this model also incurs costs as it necessitates significant investment in engineering resources to ensure its scalability and ongoing maintenance.
- Grammarly serves as a prime illustration of how a freemium model, meticulously designed, can propel an organization towards substantial expansion and widespread popularity.
- Grammarly operates on a freemium service model, strategically designed to maximize its reach. The product itself is tailored to encourage virality by providing a comprehensive range of free tools that are compatible with most devices.
- It is crucial to emphasize that a freemium model is not a one-size-fits-all solution and should not be considered a standalone business model, but rather a strategic tool for fostering growth. However, when you have the ability to craft an exceptional product, provide a seamless user experience, implement a simplified and engaging user interface, and offer tangible benefits for paying customers, the freemium approach can become a formidable asset in propelling your business forward.
What Makes Grammarly Successful?
English is regarded as a worldwide language with significant global influence.
It should come as no surprise that over 80% of the data on the internet is stored in English since over a billion people study it professionally and over a quarter of the world’s population speaks it.
Additionally, this language is used in more than half of all publications.
Grammarly has benefited immensely from its popularity as a result of its success in a market where its rivals have failed.
Over 600 prestigious universities and organizations have carefully examined Grammarly’s goods. Even official license holders for enterprise users can now utilize it.
Through the usage of Grammarly, millions of students have improved their test scores, English proficiency, and communication abilities.
The program is also used by many experts for grammar support.
Additionally, Grammarly launched an affiliate network that has drawn a large number of ardent youthful customers who have benefited from this product.
The company’s goal is to completely transform written communication, and it’s continually working to improve user experience.
Its crew is extremely driven to do even more, which has resulted in the development of a remarkable tool that has drawn some of the best minds in the world.
The popularity of Grammarly is evidence of its quality, and it will continue to have an impact on authors and intellectual people worldwide.
Grammarly funding and valuation
According to the Crunchbase profile, Grammarly raised $110 million in its first round of fundraising in May 2017, followed by another $90 million in its second round of funding in October 2019, giving Grammarly a valuation of more than $1 billion US dollars.
Future Growth Engine
Grammarly has gathered more than $200 million after obtaining two rounds of venture capital funding.
The company’s current worth of over $1 billion has propelled it into Silicon Valley’s prestigious “VC Unicorn Club.”
Although Grammarly is a privately held firm with financial support from investors, it withholds information about its revenue.
Due to a surge of newcomers to the gig economy in the digital sector in the years 2020, 2021, and 2022, the company’s growth has been consistent.
Despite this, we assume that Grammarly has yet to give investors a return as it is still in its expansion phase.
Grammarly Marketing Strategy
Marketingland.com says that Grammarly is at the top of YouTube’s first-ever list of the most popular TrueView ads.
The score is based on what people did when they saw Grammarly ads. This shows how well the platform is at quickly explaining its benefits to potential users.
Top Grammarly Alternatives
There are many other alternatives to Grammarly that do the same thing. Microsoft Word and Apple Pages already have grammar checkers with many of the same features as Grammarly.
Still, there are a lot of other companies on the market. Some of Grammarly’s most dangerous competitors are the following:
1. ProWritingAid
ProWritingAid is an invaluable online writing assistant and editing tool designed to enhance writers’ skills and refine their work.
Leveraging artificial intelligence and natural language processing technologies, it meticulously analyzes written content, providing insightful suggestions to enhance grammar, spelling, punctuation, style, and overall readability.
This versatile program is applicable to a broad range of text types, including essays, articles, reports, blog posts, and works of fiction and non-fiction.
It offers numerous features to aid writers in their craft, such as real-time feedback, a comprehensive style guide, a contextual glossary, and a tool to identify and address the overuse of certain words.
ProWritingAid seamlessly integrates with popular writing platforms like Microsoft Word, Google Docs, and Scrivener, allowing users to harness its power alongside their preferred writing tools.
It is available in both free and paid versions, with the latter providing access to additional features and functionalities.
2. WhiteSmoke
WhiteSmoke is a software tool designed to assist individuals in improving their writing.
It thoroughly examines written content, identifying errors in grammar, spelling, punctuation, and style.
The primary objective of WhiteSmoke is to aid users in enhancing their writing skills by highlighting problematic areas and presenting possible solutions.
WhiteSmoke is particularly useful for creating official letters, and emails, as well as for business and academic writing purposes.
It seamlessly integrates with popular word processors like Microsoft Word, but it can also be utilized as a standalone application.
With WhiteSmoke, you have the ability to thoroughly review your work for grammatical and writing mistakes.
Additionally, it offers a thesaurus, translator, and pre-made templates for resumes and business letters, facilitating the writing process further.
3. Hemingway App
The Hemingway App is an online writing tool designed to improve readability and clarity in your writing.
Named after the renowned American author, Ernest Hemingway, known for his straightforward writing style, this app aims to emulate simplicity and directness.
By using the Hemingway App, you can identify issues within your writing, such as lengthy sentences, complex vocabulary, and passive voice constructions.
Moreover, the app provides a readability score that corresponds to a specific grade level, enabling you to gauge the accessibility of your content.
Whether you’re crafting a blog post, a school assignment, or any other form of written material, this software assists you in creating text that is both comprehensible and lucid.
While the desktop version of the Hemingway App is available for a nominal fee, you can access the web version completely free of charge.
Conclusion: How Does Grammarly Make Money?
Grammarly is a popular digital writing assistant that offers grammar, spelling, and plagiarism checks.
While a basic version is available for free, Grammarly generates revenue through a freemium model.
It offers paid subscriptions with various plans, including monthly, quarterly, and yearly payments, granting access to advanced features like vocabulary improvement tips, genre-specific writing style checks, and a plagiarism detector that scans billions of web pages.
Additionally, Grammarly earns money through affiliate deals with websites in the writing and education sectors.
When users sign up for Grammarly through these affiliate links, the company receives a commission.
Frequently Asked Questions
How much money does Grammarly make a year?
The annual revenue for Grammarly is $8,000,000. The data science team at Zippia conducted considerable study and analysis, and they uncovered the following important financial KPIs. Grammarly generates $8,898 for every one of its 899 workers. In 2021, Grammarly’s revenue peaked at $8 million.
How is Grammarly monetized?
Grammarly makes money from both paid memberships and content written by people. The way Grammarly makes money is similar to how Dropbox and Trello do it. This means that the basic features of the product are free, but additional features will cost money.
How does Grammarly afford so many ads?
Grammarly will just put ads in the cookies of your browser and show them whenever you go to a website. They show us ads for Grammarly over and over again until we give in and start using it. This is great for business purposes.
How does free Grammarly work?
Grammarly makes it easy to improve your writing by giving you good ideas. With the help of our free service, you’ll be better able to find and fix spelling mistakes, bad grammar, and bad punctuation. Also, Grammarly Premium has a lot more features that can help you improve your writing and use it to its fullest.
Why is Grammarly so expensive?
Grammarly is a highly sophisticated AI technology tool that provides a wide range of useful tips and tools for writers. It boasts an abundance of features, employing a natural language approach through machine learning, resulting in remarkably precise speech accuracy. Consequently, Grammarly’s cost is relatively higher when compared to alternative grammar checking tools that are currently available in the market.
Does Grammarly Business cost money?
Yes, Grammarly provides both monthly and annual subscription options for Grammarly Business. If you choose the annual plan, you’ll be billed in a single payment. For 3 to 9 seats, the cost is $180 USD per seat annually, which amounts to an average monthly cost of $15 USD. If you have 10 to 49 seats, the price reduces to $174 USD per seat annually, resulting in an average monthly cost of $14.50 USD.
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