Correcto raises €6.5 million
Correcto raises €6.5 million
A writing assistant for Spanish speakers
Public Data
Company: Correcto
Press Release: TechLoy
Market (geography): Spain, Latin America, US
Market (industry verticals): SaaS, AI copilot
Customer demographic: Enterprise, HE, Adults
TAM estimate: 591M global Spanish-speaking population
Leadership Team: Abraham López Lee, Ignacio Prieto Mayorgas, Antonio Triguero Noriega
Investors: Octopus Ventures, Carya Venture Partner, River Park Ventures
Business in brief: Correcto’s writing assistant checks for spelling, grammar, punctuation, and style errors in Spanish, offering users corrections and explanations to help them learn from mistakes. The tool also uses machine learning to suggest improvements adapted to your writing context, from informal communications like emails to business and academic formats. The business model is oriented towards B2B and B2C sales: corrections are offered freemium, while writing assistance and text statistics are additional paid-for features (at a cost of €9.99/month or €69.99/year for the B2C model, and €12.99/month or €89.99/year B2B).
Public business data:
120,000+ downloads (company-provided)
70,000 monthly active users (company-provided)
Follows a €575K ($616k) round in 2022, led by Fuel Ventures and Asymmetry Ventures.
ETCH Assessment
Bull case:
This is the second raise in as many years for Madrid-based Correcto. Founded in 2021, the company has already built a strong presence in countries like Argentina, Colombia, Mexico, Spain and the US. The product is exclusively focused on Spanish, which is the third most popular language in the world – spoken by 591M people in 44 countries, and considered the official language in 21. In this context, Correcto’s goal to reach 1M users by 2024 doesn’t seem outlandishly ambitious. Latin America, where 82% of native Spanish speakers live, presents a compelling growth opportunity.
Correcto also seems to have found a gap in the SaaS market. Their biggest competitor, Grammarly, is firmly directed into the English market and doesn’t seem to have intentions to diversify into another language any time soon. But Grammarly provides a helpful case study on the size of the opportunity: the company has raised $400 million to date, including a $200 million round two years ago at a reported $13B valuation. By contrast, indirect competitors such as Language Tool, MyStilus, Sapling.ai, SpellBoy and Plagly are spread across 15-20 different languages, so it’s easy to imagine how Correcto will add more value for users by developing and innovating Spanish-specific features, and by catering to the diverse variations of Spanish spoken across different countries. (Latin American companies tend to prefer using Castellano as their main point of reference, for example, so Correcto follows La raíz guidelines in terms of grammatical standards.) The roadmap that could enable Correcto to become a global leader in Spanish language writing improvement is clear. As well as international expansion, these funds will be used for further product development and growing the team (which has already swelled from 6 to 25 in the past year).
Bear case:
GTM strategy will be key. While the public conversation is full of doom and despair, there are no shortage of AI copilots receiving venture funding for a wide range of workplace productivity needs, such as Glyphic AI for sales teams, Magic for coders, Spellbook for lawyers, and Writer Inc’s $100M Series B.
Most of these copilots simply wrap a user interface around OpenAI, so Correcto’s proprietary dataset provides some useful differentiation to build upon. But to achieve scale, it will be crucial for Correcto users to understand the value-add of a specific writing assistant plug-in rather than automatically reaching for a general-purpose AI language tool like ChatGPT. (We are watching the battle between ChatGPT and Chegg closely.) There is white space here: ChatGPT can be useful for generating ideas or writing prompts, but it doesn’t provide the same level of feedback and is not designed specifically for writing assistance. If Correcto can make this case, the demand is there. Businesses now use an average of 130 SaaS applications and there are plenty of writing copilots in the English language but no comparable tool – yet – in the Spanish-speaking market.
We’re still early in the introduction of AI-enabled writing tools, so it’s tough to predict which features will become table stakes and which will create genuine differentiation. As things stand, Correcto is bullish about the power of its model compared to big players who depend upon straightforward statistical predictions for writing suggestions – so while Gmail sees you write “kind” and suggests you follow this with “regards” (because if millions of people are starting a sentence the same way, there’s a high probability that you are too), Correcto’s in-house dataset contains >1.5 million phrases in Spanish and uses ML models to understand the overall context of your text to drive targeted recommendations. For now, Correcto can get an edge with integrations to essential platforms for businesses and students writing in Spanish, such as Microsoft Word, Slack, Gmail, and so on. But can they create medium-term defensibility if any of the big players were to set their minds to it?
In the company’s words:
We wrote this post using the information publicly available to the ETCH team. If you are a member of the Correcto leadership team, we welcome your feedback! We will update this post to include any commentary you feel appropriate in this section.
Email matt@etch.club for more information
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