Atlanta-based Grayscale’s Road To Paylocity Acquisition

ATLANTA, July 20 (Hypepotamus) - Co-founder Ty Abernethy  and Hubert Liu built Grayscale out of Atlanta Tech Village as a bet that they could fix a blind spot in hiring and recruiting. Their solution signed customers ranging from multinational food manufacturers to consumer brand giants, and this spring, it got acquired by Paylocity (NASDAQ: PCTY). Behind that acquisition was eight years of scaling, a workforce upended by the pandemic, and a pipeline that dropped to zero before it grew. After the acquisition, Abernethy chatted with Hypepotamus about entrepreneurial lessons learned along the way while building Grayscale. 

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The gap in hourly hiring

Abernethy, a graduate of the University of Georgia, started Grayscale after building another startup in the workforce-technology space, ConveyIQ. By 2018, he said the recruiting software market had largely solved hiring problems for salaried, white-collar roles. Hourly and blue-collar hiring still left a lot to be desired. 

Existing tools, Abernethy told Hypepotamus, made it easier to find "skilled, hard-to-find talent" but did little for employers managing high-volume hourly hiring in industries like manufacturing, retail, and hospitality. In those sectors, speed often determined which employer landed the candidate. 

ConveyIQ helped shape the direction of Grayscale, since Abernethy noticed the pain points customers felt around “high-volume, mass hiring.” After leaving ConveyIQ, he called those same customers to talk through their hourly hiring challenges. Those conversations shaped what became Grayscale, and the company signed its first handful of customers soon after.

Navigating post-pandemic hiring realities

Grayscale was still a two-person team working out of Atlanta Tech Village when the pandemic hit in 2020. The impact on its business was immediate. 

"Suddenly the pipeline dried up," Abernethy said, thinking back to March 2020. "We had a lot of late-stage deals that completely went away. Employers stopped hiring. It was a very scary moment."

But by summer 2020, conditions shifted, and Grayscale found itself at “the right place at the right time," Abernethy said, as labor shortages forced other businesses to figure out more strategic ways to bring on employees who might instead be joining the gig economy, going back to school, or leaving the workforce completely. 

“Companies were looking for any edge they could get,” Abernethy added. 

To scale post-pandemic, Grayscale took on venture capital in 2021, and ultimately raised $13.3 million in outside capital from firms like Atlanta Ventures and Overline VC.

At the time of their investment, Atlanta Ventures’s team said they were impressed with Abernethy’s understanding of the market and his sales skills. 

“Most importantly, customers like Peloton, Wayfair, and DoorDash love not only the product but the way in which the Grayscale team supports them to improve metrics such as reductions in time to fill roles and increases in interview sit rate, which ultimately help reduce the number of candidates seen to fill roles and the time it takes a recruiter to fill an open position,” Jon Birdsong and A.T. Gimbel wrote in 2021. “They have seen explosive customer growth with minimal churn, as well as many customers increasing their usage and relationship with Grayscale after using and loving the product.” 

Ultimately, Grayscale, which built its office in Atlanta Tech Village, brought on customers including household names like like Ross Stores, Hersheys, and Kimberly-Clark.

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The road to acquisition

Grayscale ultimately scaled to a team of over 30 full-time employees. Abernethy said the company wasn't actively seeking a buyer when inbound acquisition interest started coming in. "We definitely were not in the market to sell," he said. "But in the wake of one of our competitors being acquired, we started getting a lot of inbound activity, so we said, let's opportunistically have these discussions."

Three or four inbound offers followed varying paths before Grayscale settled on Paylocity. "We felt like Paylocity was the right home for the business more long term," Abernethy said.

Paylocity announced the acquisition on April 6, 2026, framing it as an expansion of its AI-powered recruiting capabilities within its broader HCM, finance, and IT platform. 

"We're continuing to invest in AI to simplify one of the most time-consuming aspects of work — hiring — for both employers and candidates," said Toby Williams, Paylocity's president and CEO, in the announcement. "Grayscale helps teams respond faster, maintain stronger candidate engagement, and focus on selecting the right talent."

Financials of the acquisition were not disclosed. Paylocity said it does not expect the acquisition to materially affect its fiscal 2026 results. 

When asked about highlights from scaling Grayscale, Abernethy told Hypepotamus that he will remember the “hold onto your hat” growth moments the company had, especially as they quickly went from hitting $1 million to over $5 million ARR. But he also points to the opportunity he had to scale the company alongside co-founder Liu. 

"Hubert was a rare find — a fantastic technologist, with a quick wit and calm, zen-like presence in the face of the madness of startup life. He helped ground me, while helping us stay focused and laughing along the way," Abernethy told Hypepotamus.

HRTech In The Southeast 

Grayscale was one of several startups in the Southeast region building technology to improve the hiring and recruiting process. Others scaling at the same time as Grayscale included Tampa-based Chattr (acquired by UKG), Charleston-based Sprockets (acquired by Humanly), Chattanooga-based WorkHound (acquired by Workstep),  Atlanta-based Illoominus, Tampa-based Fractio, Kingsport, Tennessee-based Personality Pool, Mobile, Alabama’s Auditocity, Atlanta-based Juvo Jobs, and Birmingham-based VeroSkills. Other startups in the space that have closed up shop in recent years include Birmingham’s Boulo Solutions, Nashville-based Clovers, and Techstars Atlanta graduate Joonko.