VCs put $110M into software that checks grammar

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(Bloomberg) -- Venture capitalists want a piece of just about anything involving artificial intelligence, whether it’s computers learning to drive or helping people shop for clothing. The latest to get a sizable investment is a startup looking to use AI to improve people’s grammar.

General Catalyst, a Silicon Valley venture firm, said Monday that it led a $110 million investment in Grammarly Inc. The San Francisco startup makes software that underlines awkward words and phrases in the user’s writing and makes suggestions, similar to a feature in Microsoft Word.

Grammarly promises to do more than fix spelling and syntax. It said the software tailors the tone and word choice of personal or professional writing for the 6.9 million people using the tool daily, many of whom interact with the service through a web browser extension for Google Chrome.

America’s startup market has come back to life after a lull in recent months. The Bloomberg U.S. Startups Barometer, an index of fundraising and other private market deal-making, is up 6 percent from a year ago.

Grammarly’s funding round is among the largest initial investments for a technology startup recently. The founders of Grammarly had eschewed venture capital since setting up the company in 2009. Grammarly said its business is profitable. In addition to General Catalyst, investors in the round include Breyer Capital, IVP, SignalFire and Spark Capital.

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