How Does Grammarly Make Money In 2024? (Business Model)📈

How Does Grammarly Make Money

Are you curious about how Grammarly makes money? You are at the right place. I did my research on Crunchbase Grammarly’s operations and its business model.

In this guide, I will provide all the valuable information regarding Grammarly revenue 2023 and other associated factors, such as Grammarly cost per year, profit, and funding.

Grammarly provides both Free and Premium versions. The Free version is a basic grammar & spell checker with limited features, while the Premium version contains unique features like Style, Engagement, Delivery, Clarity, and more.

The Premium has two types of plans: Individual Plan and Business Plan. You need to pay a high amount to get the Grammarly Premium.

Let’s talk about how Grammarly makes money, its valuation, and its annual revenue. I will also discuss who owns Grammarly and its business model. Read along to know more!!

What is Grammarly?

Grammarly is one of the most popular grammar checkers and spell checkers online. This tool provides real-time suggestions on grammar errors while I am writing.

It provides suggestions on Clarity, Style, Engagement, Delivery, and more.

Grammarly Interface

If I am a Grammarly Premium user, I can also use the Plagiarism checker to check the originality of my content.

Let’s talk about Grammarly in detail below.

Who Owns Grammarly?

Grammarly isn’t owned by one person. Instead, it’s a team effort. Max Lytvyn and Alex Shevchenko started Grammarly back in 2009. They are from Ukraine and met while studying computer science. Initially, they faced difficulty in English. They made Grammarly for non-native speakers of English only, but later on, it became a tool for everyone.

According to Forbes, around 22% of Grammarly belongs to investors who invested in the funding rounds in 2019 and 2021. The number of investors took a hike when Grammarly released its browser extension in 2012.

In simple words, Grammarly is owned by Max and Alex, along with several of its investors.

How Grammarly works?

First things first, Grammarly has two versions.

The Free version helps me fix the basics like grammar and spelling.

Then, there’s the Grammarly Premium version that offers suggestions on Style, Engagement, Delivery, Clarity, and more. The paid version also provides a Plagiarism checker and advanced AI content generation with GrammarlyGO.

Grammarly is a versatile tool that is available on most platforms. I have used this tool in the Grammarly desktop app, plug-ins, and browser extension. It’s not only limited to the desktop version. Instead, I can use this tool on my iPhone using Grammarly iOS or Android app.

Grammarly uses rule-based and machine-learning algorithms. It learns from tons of pre-written articles and knows what’s right and wrong. This tool provides real-time suggestions and rewrites on all the grammar errors while I am writing. Grammarly suggests, fixes, and explains the reasons. The explanations help me learn about grammar while writing.

Grammarly provides plagiarism checkers, where I can check the originality of my content. It uses a database of 16 million online documents to find plagiarism.

The GrammarlyGO can help me understand what is needed to generate new content based on some given prompts.

If I am unsatisfied with the Grammarly software, I can approach an Expert Writing Help to get my content checked by a human editor. This service does not come with a Grammarly subscription. Instead, I need to pay extra for the same thing.

Grammarly Funding & Grammarly Valuation

Grammarly Crunchbase’s report states that Grammarly attracted investors to collect an investment of $110 million for the first funding in May 2017. The second funding was done in October 2019 to collect another $90 million.

After these two funding seasons, Grammarly was given a $1 billion US Dollars valuation.

Grammarly’s valuation in 2023 is $13 billion.

How Does Grammarly Make Money?

So far, I have discussed many essential things about Grammarly. But how Grammarly makes money still needs to be answered.

Note that Grammarly’s annual revenue is $8.8 million in 2023. Let’s go through the insights into how Grammarly can generate revenue:

Grammarly Premium Individual Plan

PlanPrice per monthPrice Per PaymentAnnual Cost
Monthly subscription$30$30$360
Quarterly subscription$20$60$180
Annual subscription $12$144$144

The Grammarly premium version will be the primary source of Grammarly revenue in 2023. Around 30 million people use Grammarly daily, and a fraction use Grammarly Premium.

The paid version has amazing features with unlimited suggestions and plagiarism. I can choose plans monthly, quarterly, or annually, depending on my needs.

Grammarly Pricing

I suggest choosing the Grammarly price yearly to save money in your pocket.

Grammarly Business Plan

PlanPrice per member per MonthTotal Cost per Month(For a team of 3 Members)Annual Cost(For a team of 3 Members)
Monthly Subscription$25$75$900
Annual Subscription$15$45$540

Businesses can buy Grammarly Premium Business Plans. They can get easy help with the Grammarly features in developing the content of their websites, emails, and other professional work.

The pricing of a Business Plan is different from that of a Premium Individual Plan. The cost depends on how many people are on board and for how long.

Expert Writing Help

Grammarly provides Expert Writing Help, where real humans proofread your content. If I need serious help, I can send my work to them.

Real humans proofread, edit, suggest, and help out for a fee. It contributes a huge amount to Grammarly’s profit. 

Depending on how fast you need your document returned, you can be charged. Take a look at the below rate for Expert Writing Help:

  • 24 hours–  $0.069 per word
  • 12 hours–  $0.099 per word
  • 3 hours– $0.179 per word

Licenses for Universities and Schools

Grammarly makes money by letting universities use their smart software. They license it out, and it’s a win-win for both universities and Grammarly:

Educational institutions can grab Grammarly@edu, giving students and teachers VIP access. The price depends on how many of us use it and for how long.

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

It’s better to choose the annual plan because the Grammarly price per year always costs the least per month.

Grammarly Business Model

Grammarly uses a combined Business Model of the following models:

  • Freemium business model
  • Software as a service (Saas) business model
  • Software licensing business model

Let’s take a look at the Business Model that Grammarly follows:

Grammarly’s Customers

  • Individual Users: I can use the free or pay for the premium version.
  • Commerces: Businesses can buy the premium version for their employees.
  • Educational Institutions: Schools can grab the premium version for students.

Value Proposition of Grammarly

  • Grammar and Spell-Checking: Provides suggestions for my mistakes in real-time.
  • Plagiarism Detection: Helps me find plagiarism and keep my work original.
  • Writing Style Suggestions: Makes my words clearer and better.
  • Integration with Platforms: Microsoft Word, Google Docs, and social media.
  • Customer Support: 24/7 online customer care for assistance.

Grammarly’s Channels

How does Grammarly reach its customers? Well, below are the platforms how they acquire new Grammarly users:

  • Website
  • SEO and Content Marketing
  • Social Media platforms like Facebook and Twitter
  • Affiliate Marketing

Customer Relationship Management of Grammarly

  • Customer Support: There’s someone there whenever I need them
  • Regular Updates: They keep improving the tool based on users’ suggestions
  • Digital Engagement: They engage with their users using online platforms like social media

How does Grammarly Generate Revenue?

  • Premium Subscriptions
  • Licenses for universities and schools
  • Expert Writing Help

What are Grammarly’s resources?

  • Technology: Algorithms and machine learning make Grammarly super smart.
  • The Team: Developers, engineers, and language experts keep things running.
  • Customer Support Team: They address customers’ issues.

Keeping the Business Engine Running

  • Developing and Maintaining Technology: They keep the tech sharp.
  • Customer Support: Helping folks like me out.
  • Marketing and Promotion: Spreading the word to get more users.

Grammarly Business Partners

  • Affiliate Partners
  • Integration Partners like Microsoft and Google.

Grammarly Cost Structure 

  • Tech Development to make the tool better and more advanced. 
  • Marketing and advertising
  • Customer Support

Does Grammarly Sell Data For Money?

No, Grammarly does not sell our data for money. Instead, they have a strict privacy policy for the user’s saved data on their server.

As a Grammarly user, in the beginning, I used to worry about the safety of my work. Later on, I got to know the strict privacy policy of my data on Grammarly.

According to Grammarly’s website, below is the privacy policy:

  • We don’t and will not sell your data.
  • We offer a free product and hope you’ll purchase one of our paid products. That’s how we make money.
  • When you sign up for and use our products, we process your account and—if applicable—payment information.
  • To provide you with writing suggestions, we process your text. To provide you with an optimized product, we also process some additional information, such as the type of device you’re using.
  • When you join a Grammarly Business or Grammarly for Education team account, your use of our products is governed by your organization’s policies.
  • We use a small number of trusted third parties to help provide our products.
  • You can exercise your region-specific rights (like GDPR and CCPA rights).

Click on read more to know more about that category.

What Makes Grammarly Successful?

Let’s talk about the reasons why Grammarly is successful today:

Grammarly took advantage of the huge number of English speakers worldwide. A quarter of the world talks and writes in English. In this way, Grammarly serves as a grammar checker for a huge number of people on the planet.

Grammarly has built trust among its users. Professionals and students trust Grammarly, and they use it in professional settings. No wonder it’s a licensed tool for big businesses.

Millions of students use Grammarly in their assignments to get better grades. Also, their professors use Grammarly to check for plagiarism and other mistakes in the submitted assignments.

The Grammarly team keeps working on making the tool better for the users and including more features. Initially, Grammarly was just a basic grammar checker, but over time, it has become a plagiarism checker and also a content generator using GrammarlyGo.

Affiliate programs promote Grammarly by providing coupon codes for Grammarly Premium users.

Final Thoughts

Hopefully, this blog on how Grammarly makes money has helped you understand the work structure, operation, and marketing strategies of the tool.

The Grammarly company size is adequate. It has only 1.4k employees working in the company.

Frequently Asked Questions

When was Grammarly released?

Grammarly was released in 2009 by Alex Shevchenko, Max Lytvyn, and Dmytro Lider.

How much money does Grammarly make?

Grammarly’s revenue is at $178.9M for the year 2023 using its Premium subscription and other sources like Expert Writing Help.

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