This was published 4 months ago
How a Ukrainian duo became billionaires correcting work-from-home emails
By Blake Schmidt and Alexander Sazonov
Brad Hoover wants the world to write better English – error-free, no plagiarism and, of course, with proper grammar.
He’s not a teacher or politician. Hoover, 43, is a former venture capitalist who’s now chief executive officer of Grammarly, a San Francisco-based company that uses artificial intelligence to enhance writing.
Grammarly founders Max Lytvyn and Alex Shevchenko are worth about $US2.4 billion each. Credit:Kamloopsmatters.com
Started by three Ukrainians in 2009, Grammarly has more than 600 employees and works with more than half a million applications to analyse 14 trillion words a year for its 30 million daily active users across the globe. With the majority of English speakers worldwide located in regions where it’s not the main language, there’s still ample room to expand, Hoover said.
Grammarly is already one of the world’s biggest unicorns after raising $US200 million ($281 million) in November from investors including BlackRock and Baillie Gifford, valuing the company at $US13 billion. Its previous funding round came in 2019 at a valuation of more than $US2 billion. That was just months before the Covid-19 pandemic displaced tens of millions of office workers and left them typing to colleagues from home.
“We saw our business accelerate with the move to remote work,” Hoover said. “In the past, people were left to their own devices to figure out how to communicate well. We’re now at a very unique point in time to use software to enable people to communicate.”
Grammarly has made billionaires of at least two of its founders, Max Lytvyn and Alex Shevchenko, who are worth at least $US2.4 billion each, according to the Bloomberg Billionaires Index. Backers who participated in funding rounds hold a 23 per cent stake, data from PitchBook and Bloomberg show.
Hoover declined to disclose his position or that of Grammarly’s third co-founder, Dmytro Lider, only saying that “as an employee group, we have the majority.”
Grammarly is one of several upstart tech companies with roots in the former Soviet bloc, where tycoons have typically minted their fortunes in commodities. GitLab, a software-tools platform that went public in October, was founded by two Ukrainians; Vlad Yatsenko helped create financial-services firm Revolut; Latvian-born Valery Vavilov started Bitfury Group, a provider of crypto-mining equipment; and Romania’s Daniel Dines began automation-software maker UiPath Inc.
“We’re proud to represent Ukraine on the world stage,” Shevchenko said in an email.
Shevchenko and Lytvyn became friends while studying business administration at the International Christian University of Kyiv in the late 1990s before they moved to the US and Canada to pursue masters’ degrees in that field. The idea for Grammarly came from a previous company they created to help prevent plagiarism.
“We founded Grammarly with the goal of using technology to help people communicate what they mean, a mission born from our own experiences as non-native English speakers,” Shevchenko said. “Our roots gave us a unique perspective on the complexity and power of language in helping people reach their goals.”
Grammarly has been a big winner from the pandemic-fuelled shift to remote working.Credit:E+
Lytvyn, who along with Shevchenko is a Canadian citizen, has said he prioritised customer service in the company’s early days, when it was built for universities. Soon after starting Grammarly, he told the help desk to transfer calls to him, and he would ask users about the product until they hung up.
The company’s breakthrough came in 2014, when it offered a free plan with basic features and the option to pay for advanced ones. A year later, it released free browser extensions. That helped it build a loyal base of customers and about 30,000 teams at big-name companies, including Expedia Group and Cisco Systems.
Hoover, for his part, has been at Grammarly for more than a decade, joining in 2011 from venture-capital firm General Catalyst Partners after learning about the software while looking for help with his own writing.
“I was blown away by the product and the team,” he said. “We were founded outside of the US, and didn’t raise money until we were eight years old as a company. And it’s very unique that we’re profitable. We have been from the early days.”
The company faces a number of new challenges in its next stage of growth. For one, researchers have expressed worry that its software could fundamentally alter human expression.
It echos the broader tech industry’s concerns about artificial intelligence, which range from Elon Musk’s warnings that it could be used as “weapons of terror” to former Google executive Kai Fu Lee’s prediction that automation might replace 40 per cent of human jobs in 15 years.
“Authentic communication is very important,” said Andrea Lee, a professor at Austin Peay State University in Tennessee who has studied how software such as Grammarly influences English language learners in countries like South Korea. “Students may not put in the necessary effort on assignments if they are reliant on Grammarly.”
Hoover said the company offers feedback that provides “learning moments,” rather than purely automating users’ writing, but it’s conscious of the risks around drowning out human expression.
Grammarly must also withstand a number of new AI-powered writing aids, including Microsoft Editor. The company is trying to stay ahead of the competition with new products, including for desktops, Grammarly for Developers and a partnership for a Samsung keyboard.
Jim Ranalli, an English professor at Iowa State University, helped apply for a grant to purchase 1,500 Grammarly premium licenses for students in writing-intensive courses. He said the product’s feedback is particularly useful for fixing subject-verb agreement problems, incorrect prepositions and missing articles.
“It always finds one or two things I’ve missed in an email I’m about to send off,” Ranalli said.
Grammarly expects the business world will find this kind of cleaner writing especially rewarding amid the move to more flexible work arrangements. Poor communication could be costing US companies an estimated $US1.2 trillion annually, according to a Harris Poll study released last month that was commissioned by Grammarly.
“We’re now at a very unique point in time to use software to enable people to communicate effectively, to augment them,” Hoover said. “To fundamentally enable people to communicate and connect, to unlock problems, reduce disputes, come up with new ideas. All those things are relevant to remote work.”
Bloomberg
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