How Does Grammarly Make Money

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Grammarly is free, so how does it make money? So, here’s a detailed analysis of their three (3) revenue sources, as well as the many products and services they provide, as well as the Grammarly business model, year over year revenue, and how Grammarly operates.

What exactly is Grammarly, and how does it work?

Grammarly is a writing helper program that uses artificial intelligence to autocorrect mistakes and integrates as an extension with your browser or PC (app).

Grammarly, which was 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 with 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.

The table below shows how much money Grammarly makes from paying users and educational institution collaborations.

Here are the 3 ways how Grammarly makes 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 (for individuals):

  1. $359.40 per year: $29.95 per month
  2. $238.56 per year: $19.88 per month (33% off)
  3. $139.95 per year: $11.66 per month (61% off)

Grammarly Business (for teams):

  1. 3 to 9 members: $12.50 – $25 per member; $37.50 – $225 per month
  2. 10 to 49 members: $12.08 – $25 per member; $120.83 – $1,225 per month
  3. 50 to 149 members: $11.67 – $25 per member; $583.33 – $3,725 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), and 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), and in exchange, students at that college or university receive full access to Grammarly Premium paid version for free.

Grammarly @edu pricing plans:

  1. 5 Users: $500 per year
  2. 10 Users: $800 per year
  3. 20 Users: $1,200 per year
  4. 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:

  1. The Premium user selects the service and turnaround time they want Grammarly’s writing expert to perform,
  2. Places their order, and
  3. Waits for the email confirmation after it’s completed.

Expert writing service cost:

  1. Correctness only: $0.019 – $0.149 per word (based on turnaround time)
  2. Correctness and Clarity: unknown

Grammarly Profit And Revenue

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 generates revenue using a number of revenue methods that they integrate within their firm. These are:

  1. Freemium business model
  2. Software as a service (Saas) business model
  3. 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.

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.

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