(Bloomberg) -- Grammarly Inc., the maker of artificial intelligence-powered writing assistance software, is acquiring productivity startup Coda in a deal that will also bring it a new chief executive officer.
Coda co-founder and CEO Shishir Mehrotra will take over that position at Grammarly, according to statement from the two companies Tuesday. Grammarly’s current top executive, Rahul Roy-Chowdhury, will remain on the board.
The companies didn’t disclose financial terms of the deal, which is expected to close in January. Coda was valued at $1.4 billion in 2021 after its Series D funding round. Grammarly is valued at $13 billion, Roy-Chowdhury told Bloomberg in September. Its valuation is unchanged from 2021, the company said.
The acquisition comes a few months after Grammarly hired new chief financial and technology officers, as it looks to an eventual public stock offering, Bloomberg previously reported. New CEO Mehrotra said his goal is to build a long-lasting company, and going public is a milestone in that path.
Grammarly is focusing more tightly on AI this year. This acquisition is a further step in that direction, Grammarly co-founder Alex Shevchenko said in an interview.
The company already offers a smart AI writing assistant, while Coda makes AI-powered collaboration and productivity tools. By acquiring Coda and its technology, Grammarly is looking to build more tools to help with workplace tasks by pulling details from customer relationship management systems or emails. It will be powered by Coda’s product called Coda Brain, which collects data from across various systems.
Grammarly already integrates with other applications, but it will now also adapt Coda’s core product, Coda Docs, into its document tool for users.
“We have a massive opportunity to reinvent productivity as we know it, and Grammarly and Coda can pursue that vision faster together,” Mehrotra said.
It’s a crowded market, with Apple Inc. and other companies adding similar writing-assistant tools into their systems. By joining forces with Coda, Grammarly will go head to head with the numerous productivity startups and big tech companies building AI agents for the workplace.
Grammarly’s products are used by 40 million people daily. The company also works with corporate customers, and Coda will help grow that part of the business. Grammarly counts Zoom Communications Inc., Salesforce Inc., Ford Motor Co. and Chevron Corp. among its users.
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