Free Grammar Checker Grammarly is powered by AI
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You’ve probably all seen the Grammarly commercial with “Lily” by now. After finishing her liberal arts degree, Lily has taken up a challenging job which involves responding to people’s complaints on Twitter, except she is struggling. You see, her degree in underwater basket weaving hasn’t equipped her with the skills necessary to tell the difference between “were” and “we’re”, the difference between “effect” and “affect”, and perhaps most embarrassingly, poor Lily doesn’t even know the difference between “patients” and “patience”. That’s why Lily uses Grammarly, but what Lily doesn’t know is that soon technology like Grammarly will put her out of a job by answering tweets all by itself. You see, Grammarly, the tool that helps her not look like a tool, is powered by artificial intelligence (AI) and it’s getting smarter every day.
Founded in 2008, San Francisco startup Grammarly just took in a $110 million funding round last week which raised some eyebrows considering that the Company hasn’t taken in funding before and has bootstrapped their way all the way until now (bootstrapped generally means that you use revenue to grow your startup instead of selling equity to outside investors).
Update 11/17/2021: Grammarly has raised $200 million in funding at a $13 billion valuation to accelerate product innovation and team growth. This brings the company’s total funding to $400 million to date.
Tech Crunch wrote an article on Grammalry last week which we were able to summarize into a single sentence:
Grammarly is a profitable company that offers a “freemium” grammar checker to 6.9 million active users, some of whom spend $29.95 a month to upgrade for help with sentence structure and vocabulary.
Actually, TechCrunch said the service was $11.99 a month but that’s only if you pay for a whole year up front. If you want to pay by month then the cost is $29.95 a month. We didn’t use Grammarly to do that summary by the way, but you can be damn sure that’s something they’ll eventually offer. For now though, the “freemium” service includes advanced grammar and spelling checks,
a thesaurus vocabulary enhancement suggestions, and a plagiarism detector – so you can make sure you’ve re-worded what you copied from other people sufficiently.
If you just want to stick with the free version, Grammarly can be used to detect problems with spelling, grammar, and punctuation. A few years ago they ranked each Major League Baseball team’s fans by their ability to communicate in written form (for readers who are not from the USA/Cuba/Japan, baseball is just like cricket except it’s not boring AF):
There are probably all sorts of uses for technology like this when it comes to academics, and one wonders how long it will be before written tests like those found on the GMAT will be graded by Grammarly. With 50% of all faculty members claiming that incoming freshmen are not prepared for college-level writing (how bad is that?), Grammarly is now used by more than 600 universities to help students “develop essential writing skills”. The only problem is that the students know they don’t really have to learn how to write because Grammarly offers enterprise plans so that employers like the one Lily works for can make sure nobody sends out poorly written communication to clients.
Now that there are nearly 7 million people using this tool for work, school, and of course social media, we start to realize that Grammarly now has access to an incredibly large “big data” set which they can now use to train their AI algorithms on. Here’s the part in their terms and conditions which lets you know that all that content you are feeding Grammarly is being used to further optimize their algorithms:
By uploading or entering any User Content, you give Grammarly (and those it works with) a nonexclusive, worldwide, royalty-free and fully-paid, transferable and sublicensable, perpetual, and irrevocable license to copy, store and use your User Content in connection with the provision of the Software and the Services and to improve the algorithms underlying the Software and the Services.
How valuable is all that content? Probably more valuable than the actual subscriptions they’re taking in. According to an article in the WSJ (paid subscribers only), last month the AI algorithms suggested 14 billion improvements across the service. There were a few other things in that article that frankly raised some eyebrows over here. Apparently, they’re working on making sure that the system flags any sort of language that might not be appropriate, like an offensive joke perhaps. Perhaps even more alarming was a comment made by the CEO who said that because nobody liked using a comma after a salutation they just decided to drop it. So it looks like this:
How are you blah blah
How are you blah blah
Really Grammarly, you just did away with that comma? Somehow that just seems strange that a startup can alter the future of the English language and decide what jokes we should or shouldn’t tell, but as investors, we shouldn’t really care about the petty stuff. Grammarly now has a war chest of dollars they can use to begin hiring more talent and expanding their business in the face of some stiff competition. One such competitor is Atomic Reach, a Canadian startup that has taken in around $7.4 million in funding to develop a platform like Grammarly, except that it specifically caters toward “content producers”. There are also other competitors who just offer grammar checking tools sans AI, like Whitesmoke (TLV:WSMK). Just take a look at Grammarly’s ad placement vs. competitor Whitesmoke:
As you can see above, Grammarly makes sure that they are poaching any potential leads from Whitesmoke as quickly as possible. Given that the amount they’ve recently raised is about 6X the current market cap of Whitesmoke, and the extent to which we see Lily every other day, it’s pretty safe to say that Grammarly will spare no expense in marketing their freemium grammar tool which will only get better over time.
Speaking of Lily, we certainly weren’t bagging on social media managers earlier when we took a few pot shots at her. We have a great social media manager here at Nanalyze who works his tail off every day making sure we’re reaching out to the companies we write about and getting our content out across all our channels like Twitter and Facebook. What he doesn’t do, is sit around all day responding to people with cheesy apologetic one-liners and emoticons.
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