Your teachers probably told you grammar is important—but did they mention it could make you a billionaire?
A $200 million investment round announced last week by popular grammar checking tool Grammarly didn’t just catapult the company’s value to $13 billion, but minted billionaires out of two of its founders: Max Lytvyn and Alex Shevchenko.The Ukrainian-born entrepreneurs, who started the automated writing assistant in 2009 with the help of programmer Dmytro Lider, are now worth at least $4 billion each thanks to the recent funding, Forbes estimates.
About 22% of Grammarly is owned by the investors involved in its two funding rounds in 2019 and 2021, according to data collected by Pitchbook.Meanwhile, Lider, the third co-founder, holds onto a stake of just 1%, a company spokesperson previously told Forbes Ukraine, a licensed edition of Forbes.That leaves Lytvyn and Shevchenko with an estimated 35% each of Grammarly’s equity, worth roughly $4 billion apiece after taking into account Forbes’ discount for private companies.A source familiar with the business confirmed these numbers.
Grammarly disputes Forbes ’ estimates but has not provided any evidence to support a different valuation of its cofounders.“Grammarly is a private company and does not disclose company ownership distribution or figures,” the company’s communications head Senka Hadzimuratovic said in an email.
The San Francisco-based company was launched over a decade ago under the quickly abandoned name Sentenceworks as a subscription-based product aimed at helping students with their grammar and spelling.It has since evolved away from its sole focus on education and opened up access to its intelligence-driven grammar checker, which can be used to easily weed out the errors in emails, documents and more.The company has also released spin-off products like Grammarly for Business, an edition of its grammar checker for corporate use which boasts big-name clients like Zoom, Cisco, Dell and Expedia.
Grammary’s key product has been widely available under a freemium model since 2015, with the option to purchase upgraded versions for prices ranging from $12 to $30 a month.
“That was an inflection point for us,” Grammarly CEO Brad Hoover told Fast Company in a 2019 interview , explaining that “word-of-mouth growth really, really took off.” Today, the company claims to reach 30 million people each day through its operations across 500,000 applications and websites, including email apps, numerous web browsers, social media and Microsoft Word.
This isn’t the only company Lytvyn and Shevchenko have started together.The pair, who met while attending the International Christian University in Ukraine, say the idea for Grammarly actually came from their previous venture, MyDropBox, which dates back to their college days.“We had built a product to help keep plagiarism out of students’ writing,” Lyvtyn wrote in a blog post in March.“This led us to ask a serious underlying question: Why do people choose to plagiarize in the first place? Could it be that they were finding it difficult to communicate what they meant in their own voice?”
Their mission may sound noble, but there were some questions raised about Lyvtyn and Shevchenko’s motivations early in their business journey when it was discovered that two online services they had launched to help professors check student papers for plagiarism (precursors to MyDropBox) appeared to have ties to websites selling term papers to students.
They told The Chronicle of Higher Education at the time that they had been hired to program a paper-mill site, but denied any connection between the two businesses.“We never ever, ever sold any papers that were uploaded to our service,” Shevchenko told the publication in 2002.
The scandal faded into an almost forgotten blip on their records when Lytvyn and Shevchenko moved to the U.S.
and Canada, respectively, to get their MBAs at Vanderbilt University and the University of Toronto.They then brought to life their vision for MyDropBox, which was ultimately acquired by educational technology company Blackboard.
It appears that one or both men may still be living in Vancouver, and it is not clear if the two men have gained citizenship in the U.S.or Canada.Grammarly has offices in San Francisco, Vancouver and Kyiv, Ukraine.
Before the most recent round, Grammarly raised $90 million from investors at a valuation of $1 billion in October 2019.That round was led by General Catalyst and included participation from IVP, among others.
The new funding brought on new investors including Baillie Gifford and BlackRock, Grammarly’s CEO disclosed in a blog post.
Additional reporting by Matt Durot.