From A Ukrainian Unicorn To A Billion-Dollar US Grammar Giant
Alexey Shevcnehko and Maxim Lytvyn from Ukraine needed less than a decade to transform their small business into a billion-dollars US-based company.
It was not an easy beginning.
Born in the poorest country on the European continent at the political border between the East and the West, they struggled to make ends meet during their studies.
As the Internet was becoming more accessible, they noticed the unethical practice of copying was spreading in the university cycles - and they wanted to do something about it!
Their inspired work resulted in one of today’s iconic tools - one that would detect plagiarism in academic papers. But this was just the start, and it quickly grew into something far bigger.
This is the story of two Ukrainians who managed to turn a Ukrainian unicorn into a billion-dollar company in a decade, while simultaneously helping millions improve their writing skills.
Alex and Max first met during their bachelor studies. Alex was following his passion for business management while Max, being the tech-savvy one, studied computer systems management. They wanted to get the best education available, and the only environment offering programs with American academic backgrounds was the International Christian University in Kyiv.
The computer technology was just becoming accessible in Ukraine at the end of the ‘90s, and some students couldn't afford a personal computer, so the tech-savvy Max was disassembling Compaqs and Dells to rebuild them for affordable prices and make the ends meet.
As the Internet became more popular in Ukraine, a practice emerged: students began copying content from downloaded research papers en masse. Alex and Max noticed that the combination of business and technology knowledge they had, was the exact recipe to make a plagiarism check tool and remove the practice, at least from their university.
They launched their first business in 2002 under the name 'MyDropBox Service'. The universities were ready to pay for such a service, and the popularity of their tool was even more interesting to foreign universities! They ended the 5th anniversary of MyDropBox Service with an international market reach and subscriptions by 800 universities from all over the globe.
Alex and Max decided to keep learning and evolving, so they went back to school. Alex enrolled in the MBA program at the Rotman School of Management in Toronto, Max has moved to the USA with the idea of acquiring an MBA in Marketing and Finance at Vanderbilt University in Nashville, Tennessee.
They were moving on new streams, so they decided to sell MyDropBox Service to Blackboard, an education technology company. For Max, this became a two-year engagement for blending MyDropBox Service into the Blackboard products.
Piercing the Veil of the Global Market
The dynamic education circles and versatile business climate of Toronto and Nashville opened different perspectives for Alex and Max. As a result, they dived deeper into the matter and started scratching beyond the surface - why do students plagiarize at all?
It was obvious that writing well and effectively at times can be exhausting and hard. There, they hit another tide in the spring and got a gem of an idea - instead of hunting copied work, why not actually help students write their papers better?
They attempted to materialize this idea by creating a new company - Sentenceworks. Both founders were invested in developing its features until 2009, but then Alex realized that the University milieu was too narrow for the vast potential of the ideas they developed together. They wanted something that would tap into broader space beyond the education platforms and reach out to anyone who wants to improve digital communication - journalists, communication officers, or anyone interested in writing on any social media!
The broiling idea made Max leave his job at Blackboard and join Alex in Toronto. Soon after they got together and worked on their idea, they started Grammarly in the summer of 2009. They needed technical support for developing their language platform and the duo was joined by Dmytro Lider.
The three entrepreneurs, Alex, Max, and Dmytro funded the new startup from their own pockets. They monetized the services they had offered until then, freeing themselves for their fresh start on favorable grounds. The office in Kyiv was growing day by day, reaching 70 employees from a starting group of 10, and soon a new office was opened in Vancouver. The ambitious innovation strategy involved the highest artificial intelligence technology solutions, integrated into the Grammarly service library.
"We saw somebody buying 5 or 10 Premium accounts within just minutes on the same credit card," said Max.
They wanted to listen to their clients and how their tools could help them make the desired career progress and support their confidence when writing. They prepared a weekly report showing the clients their growth and evolution, which caused the number of subscriptions to rise constantly - even though competitors such as Microsoft, who integrated AI power solutions, and Google, who introduced grammar checks, were slowly catching up.
But, the management team was breaking waves: Grammarly was favored in the business and journalist environment and reached 10 million subscribers in 2015. Their initial strategy to not introduce free services was still their preferred strategy - and it was working!
Living the Ukrainian Californication
In 2017, another important event helped them grow further. San Francisco-based Brad Hoover, who spent six years as a venture capitalist for General Catalyst, started using Grammarly before hiring a writing advisor.
Blown away by the quality of the service, he wanted to get in touch with the founders.
One afternoon, while Max was planning his trip from Toronto to Kyiv, came a phone call.
Max postponed his trip immediately - Brad was coming to meet him and Alex!
After the meeting, all three sensed that the new CEO of Grammarly should be Brad and that a new opportunity was on their hands, as outside investments poured into the company.
Soon after Brad became CEO, Grammarly opened new offices in San Francisco and New York, marking the start of a new era in the company - especially in the financial department!
Climbing the Ladder
General Catalyst’s GM, Hemant Tenaja, was convinced in Grammarly’s mission and opted to support its development. It was unusual to invest in a company that wasn’t in its early stages of development, but his $110 million still arrived in May of 2017. Even though Brad took the CEO position with his experience as a venture capital investor, Grammarly did not convert into a traditional venture-funded startup, continuing to offer paid services.
Another round of investment of $90 million was made in October 2019, and the money was used to integrate an AI-based system that combined grammar and writing tools. Everything was in place to turn Grammarly from a writing assistant tool, to a full-fledged communication assistant.
After the second round of investment part of Grammarly services were ready for freemium. The basic writing suggestions related to spelling, grammar and punctuation became free for everyone, while payable premium services for individuals and businesses were upgraded with writing style, tone and clarity features.
The three founders Alex, Max, and Dmytro are still part of Grammarly. Alex is currently holding the position of Product Manager, Max is Head of Growth Strategy, focused on identifying and expanding new market opportunities for Grammarly’s product portfolio and Dmytro is Head of Language Strategy focused on technical product management of Grammarly’s text analysis engine.
The number of employees today is approximately 200 on both sides of the ocean, but with around 2 billion English speaking customers, the future's looking brighter than ever for Grammarly! Even this article was written using Grammarly!