Grammarly is free, so how does Grammarly make money?
So, here’s 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 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.
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 online writing assistant and editing tool that was made to help writers improve their writing.
It looks at written material and suggests better grammar, spelling, punctuation, style, and readability based on artificial intelligence and natural language processing technologies.
The program can be used to examine a wide range of text, including essays, articles, reports, blog posts, and even fiction and non-fiction books.
There are many features, such as real-time feedback, a detailed style guide, a contextual glossary, and the ability to find overused words.
ProWritingAid can be used on its own or with other popular writing tools like Microsoft Word, Google Docs, and Scrivener.
There is a free version and a paid version, with the paid version having more features and functions.
2. WhiteSmoke
WhiteSmoke is software that checks for mistakes in grammar, spelling, punctuation, and style in written material.
Its goal is to help people write better by pointing out problems and offering ways to fix them.
WhiteSmoke is good for official letters and emails as well as business and academic writing.
It can work with popular word processors like Microsoft Word, or it can be used on its own.
You can use WhiteSmoke to check your work for grammar and writing mistakes. You can also use its thesaurus, translator, and resume and business letter templates that have already been made.
3. Hemingway App
The Hemingway App is a web-based writing tool that makes writing easier to read and more clear.
It gets its name from the simple, direct writing style of Ernest Hemingway, a famous American author.
The Hemingway App will point out problems with your writing, such as long lines, hard-to-understand words, and the use of passive voice.
In addition, you get a grade-level equivalent readability score for your material.
The software will help them write text that is clear and easy to understand, whether they are writing a blog post, a school paper, or something else.
The desktop version of the Hemingway App costs a small amount, but the version you can use on the web is free.
Conclusion: How Does Grammarly Make Money?
Grammarly is a well-known digital writing helper that can check for grammar, spelling, and plagiarism.
The company has a freemium business plan, which means that users can get a basic version of the tool for free, but they have to pay for a premium version to get access to more features.
So, how does Grammarly earn money? The answer is that it has a strategy for paid subscriptions.
Grammarly has a variety of paid plans for users, including monthly, quarterly, and yearly payments.
With these plans, users can use advanced features like tips for improving vocabulary, genre-specific checks for writing style, and a plagiarism detector that checks over 16 billion web pages.
Grammarly also has a business plan that gives teams access to advanced features and management tools.
Grammarly also makes money through affiliate deals and paid subscriptions. The company has affiliate deals with many websites, including writing and education websites.
When people sign up for Grammarly through these affiliate links, the company gets 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.
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