
VCs Put $110M into Grammar-Checking Software - rayuela
https://www.bloomberg.com/news/articles/2017-05-08/vcs-put-110-million-into-grammar-checking-software
======
dougb5
Whenever I'm surprised by an investment announcement like this, I like to look
the company name up on Google Trends. This curve will give you a sense of how
rapidly user interest in Grammarly has increased the past few years:
[https://trends.google.com/trends/explore?date=all&q=grammarl...](https://trends.google.com/trends/explore?date=all&q=grammarly,hacker%20news)

It's no Snapchat or Instagram, but it's comparable to, say, Docker in
magnitude and trajectory. I hear from a lot of writers through my own
websites, and I hear them mention Grammarly more and more often lately.

That's not to say the $110M investment makes sense, just that Grammarly may be
more popular than the community here realizes.

~~~
zazpowered
SimilarWeb is showing 30m monthly website visitors
[https://www.similarweb.com/website/grammarly.com](https://www.similarweb.com/website/grammarly.com)

I could see why their daily user engagement would be really good but I wonder
what their paid conversion rate is because I imagine it wouldn't be that great
in the US.

------
astrodev
The negative comments don't make any sense. It's hard for me to understand why
a bunch of people who clearly don't understand the domain complain how more
informed parties invest their money.

I use Grammarly daily. The subscription is cheap compared to hiring a
proofreader, which I used to do. The market for ESL speakers is huge, and
native speakers, too, can often benefit from improving their writing.

~~~
wwwigham
How much more targeted and useful are their suggestions compared to a rule-
based tool like proselint[1]?

[1]
[https://github.com/amperser/proselint](https://github.com/amperser/proselint)

~~~
astrodev
I can't make any general statements. I checked both tools against a document
that was recently corrected by a human proofreader. Out of six errors found by
the human, Grammarly identified three and proselint none.

"only half of the mass if accounted for by the stars", misspelling "if" ->
"is"

"in the heath death scenario", misspelling "heath" -> "heat"

"The quantity follows Gaussian distribution.", missing article

------
tedsanders
To those, who like me, felt a knee-jerk reaction to criticize:

If you are going to make a criticism, don't make a sarcastic or snarky
comment.

Instead, make an argument about why there is no potential in a product that:

\+ increases the quality & productivity of one of the most valuable and
professional skills that's used in 99% of all jobs

\+ has a potential customer base of over 1 billion people

\+ has near-zero marginal costs

\+ has increasing returns to scale due to its cost structure

\+ has increasing returns to scale due to its product development being based
on learning from user data

\+ is based on a new machine learning paradigm that has recently made huge
gains and has unknown potential

And just think about the value of writing. Some people make their entire
living from writing (journalism, etc.). A large fraction of the population
needs good writing skills in their job, just to share information and persuade
others to act. If improving your writing - on items like your cover letter,
your professional emails, your product - gives you a 1% boost to productivity
and a 1% higher chance of a promotion, then this $110M is nothing compared to
those percentages multiplied over the English-speaking population.

Of course, the whole idea could be a bust. But if you think so, make the
argument why. Resist the temptation to post brief, snarky comments about how
VCs are stupid.

~~~
askafriend
Thank you for saying this. I would wager that a majority of people who comment
can't think in these terms and resort to the easy way out - which is snark.

Just look at threads about Facebook, for example. It's usually just pure
unsubstantiated hate and very little intelligent/interesting comments.

------
strict9
A "free" product (Chrome plugin). The checks for grammar aren't transient, per
the privacy policy:

>User Content you transmit will be stored on our servers, which are located in
the United States. When you use the Software on your computing device, User
Content you save will be stored locally on that device and sync with our
servers.

How well would adoption would be if more users realized (most) everything they
type in a web browser is stored on a remote server? I also wonder how often
employees have violated HIPAA or something similar via a careless Chrome
extension installation like this one.

Maybe they have a solid security policy and won't use "User Content" for
nefarious reasons, but this is one free product I'll avoid.

~~~
dragonwriter
> I also wonder how often employees have violated HIPAA or something similar
> via a careless Chrome extension installation like this one.

If you are a HIPAA covered entity, you probably shouldn't be allowing anyone
to have the ability to install any software, including browser extensions, on
any workstation they can use to access PHI, and any centrally installed
software should have a privacy and security review before being permitted.

Of course, I know that's often not true, but that's a high-level
organizational failure.

~~~
ben_jones
I'm not versed in HIPAA or PII but I wonder if grammarly is stashing text
typed into emails? How many business strategies, private conversations, and
other such things, are they holding (and likely plan to parse with machine
learning somewhere in their pitch deck... if they aren't doing it already)?

EDIT: apparently it's used with Gmail, so the answer is yes they are parsing
business strategies, private conversations, and other personal things in their
data pipeline with, quoted from a comment further down, "presumably a future
play in adtech or AI".

~~~
yellow_postit
I'd like to see data scrubbing/anonymisation disclosures become standard for
services like this. Knowing there's a robust email or SSN scrubber would
increase confidence, though for unstructured PII you have somewhat of a
chicken and egg problem where you need training samples to build the robust
anonymiser.

------
kristianp
From Techcrunch [1] "Grammarly has 6.9 million daily active users, most of
whom use the service for free. The startup makes money on the users who pay
$11.99 per month for help with sentence structure and vocabulary."

[1] [https://techcrunch.com/2017/05/08/grammarly-
raises-110-milli...](https://techcrunch.com/2017/05/08/grammarly-
raises-110-million-for-a-better-spell-check/)

~~~
afuchs
Unroll.me made some money from showing their users advertisements. Many of
their users assumed that this was the service's only source of revenue. They
also sold their user's data [1], prompting backlash from those users.

How can you be sure that a service, like Grammarly, isn't selling it's user's
data, or will do so in the future?

[1] [https://www.nytimes.com/2017/04/24/technology/personal-
data-...](https://www.nytimes.com/2017/04/24/technology/personal-data-firm-
slice-unroll-me-backlash-uber.html)

------
lucasmullens
Honestly this seems pretty valuable. Non-native English speakers can get the
tone wrong in writing pretty often, and that can sometimes make the difference
between whether you get a job or whether you get properly recognized for your
work.

------
bobjordan
I love both Grammarly and Hemmingwayapp, which I use both daily. Also, I think
there is a huge market for these type of apps in China. If I were assured
there are no GFW issues with servers located in China, I'd buy it for all of
my customer facing employees in our China office.

------
walterbell
Standalone proofreading software for Windows & Word:

Editor, $55, [https://www.serenity-software.com](https://www.serenity-
software.com)

StyleWriter, $90 - $190,
[http://www.editorsoftware.com/StyleWriter.html](http://www.editorsoftware.com/StyleWriter.html)

~~~
apapli
Or just buy Word and get a decent grammar checker for free -
[https://blogs.office.com/2017/02/28/office-365-news-in-
febru...](https://blogs.office.com/2017/02/28/office-365-news-in-february-new-
and-improved-intelligent-services/)

~~~
walterbell
Professional proofreading involves more than grammar. Those two products are
mostly used _with_ Microsoft Word, still the primary document exchange format
in publishing.

------
nradov
How is this different from what WhiteSmoke has been doing for years? Does the
AI magic pixie dust make it more fun findable?

[http://www.whitesmoke.com/](http://www.whitesmoke.com/)

~~~
tyingq
The browser plugin allows grammarly to work on any textarea on sites, so it's
easy to use with Gmail, blog comments etc.

Of course that doesn't explain $110M.

I was surprised that neither has an API.

~~~
gerenuk
The api request was made by users from quite few years but I don't think so
they intend to release it any soon.

------
diziet
This is probably an adtech or "AI" play, as I don't know if the market for
this software as a subscription is large enough.

------
gumby
That's a pretty amazing first round for a bootstrapped company!

------
pritambarhate
As a non-native English writer, I use Grammarly every day. It's a good
product. In fact, it gave corrections for this small message thrice. It's
really particular about commas!

But when using with long articles it's grammar check isn't perfect. I hope
they get better. Best of luck Grammarly!

------
apapli
I wonder how many of the investors _didn 't_ read the latest Microsoft blog
before tipping in their funds. Sure Word isn't a web browser, but it's install
base is massive and it is still very relevant, even if it isn't web-based or
written by a bunch of hipsters.

And I suspect (although don't know) that word online also got this
functionality, or will at some stage in the future.

My bet, this is $110m up in flames in a few years' time.

[https://blogs.office.com/2016/07/26/the-evolution-of-
office-...](https://blogs.office.com/2016/07/26/the-evolution-of-office-apps-
new-intelligent-services-such-as-researcher-and-editor-in-word-and-outlook-
focused-inbox-as-well-as-continued-powerpoint-innovation-with-zoom/)

~~~
apapli
Downvoted for that, WTF?

------
msoad
Just signed up and got the confirmation email

ATTN: Grammarly only works on desktop computers (not smartphones or tablet
devices). Please re-open this email on a supported device to use the features
mentioned here.

They have lots of work to do. I see why they needed the money!

------
puranjay
I don't know about others, but the "spelling/grammar checks" that Grammarly
offers in its free version is not good at all.

Outside of the obviously errors, it does a pretty bad job of understanding
context.

------
throwaway48238
...and a Common Lisp startup too.

------
Edmond
If software has to do all of that for you, can you call the output yours?

Looks like our future will have even more semi-literate people with college
degrees than we do now.

~~~
yellow_postit
I don't understand this argument. Spell checking, human in the loop
proofreading, automatic code layout and styling are all accepted today.

------
lm5
I don't contest the 300M+ pre-money valuation given the enormous potential
market and the likelihood of locking in paying users for life, but can someone
explain to me why they need 110M?

If they're going to be as profitable as their valuation implies, why give away
so much of the company? There's no way they need that many engineers. Is it
just for a massive marketing campaign?

------
mandeepj
> Venture capitalists want a piece of just about anything involving artificial
> intelligence

It sums it up pretty well. AI is the buzzwords these days in VC circles.

------
sjg007
I always thought it weird that Gmail doesn't auto check grammar... Still
having this on mail, Facebook could be useful.

------
kesselvon
I feel most people don't realize Grammarly stores everything on a remote
server. Not sounding like an illiterate in a company email is nice, but how
many confidential emails have been written in there? Probably too many.

------
sidcool
The title can be changed to mention Grammarly explicitly for HN audience.

------
Upvoter33
this is beyond ridiculous. there is no big market for what is essentially just
a feature of any ms-word competitor. money down the drain...

~~~
tyingq
They are supposedly profitable, but yeah, the market size seems limited. It's
a freemium product. The upgrade is $30/month if you pay month to month, or
$12/month if you prepay annually. Seems high for unbundled nature of it. Maybe
someone is hoping Google buys them to put it in Google Docs, Chrome, Gmail,
etc?

~~~
flamedoge
This is not a hard problem to solve. They need to pivot.

------
cannotsay2017
Hi,

It's me, Clippy.

It looks like you're about to waste a lot of venture capital money.

~~~
vecter
Did you read the article?

> The founders of Grammarly had eschewed venture capital since setting up the
> company in 2009. Grammarly said its business is profitable.

It's hard for us to say without knowing the actual details and business
metrics, but it's quite silly for you to dismiss their 8 year old profitable
business without knowing anything.

