Dec 18, 2024 - Business

Grammarly is buying Coda to expand AI offerings

Dan Primack

Photo illustration: Aïda Amer/Axios

Grammarly, a writing assistant valued by VCs at $13 billion, agreed to buy productivity startup Coda, with Coda's CEO Shishir Mehrotra to take that position at Grammarly.

Why it matters: Grammarly is kinda/sorta one of the earliest AI agents, founded in 2009, but faces extinction-level competition from the GenAI class. Merging with Coda helps it expand from a one-trick pony into a productivity stable.

As for the CEO swap, it seems to be about both sides' desire for a founder to lead the combined company. Outgoing Grammarly CEO Rahul Roy-Chowdhury had joined in 2021 from Google.

By the numbers: Axios has learned that this was an all-stock deal at each company's most recent post-money valuation. That means that Grammarly shareholders will hold around 90% of the combined company, as Coda was last valued at $1.3 billion.

Grammarly had raised around $400 million from backers like General Catalyst, IVP, and SignalFire.
Coda had raised around $320 million from backers like General Catalyst, Greylock, and Kleiner Perkins.

Behind the scenes: This deal moved at the speed of the AI revolution. Mehrotra tells Axios that the first conversation was just three weeks ago, with the agreement signed on Monday.

He declned to comment on the deal terms.

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Grammarly is buying Coda to expand AI offerings

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