Newcastle University spinout firm Literal Labs, the logic-based AI algorithm company led by ex-Arm VP Noel Hurley, announced that it has raised £4.6 million in pre-seed funding.
The round was led by Northern Gritstone, the investment firm focused on science and technology enabled businesses in the North of England, and co-led by Mercuri, the London-based fund focused on companies at the intersection of media, entertainment and technology sectors, with participation from Sure Valley Ventures, Cambridge Future Tech SPV, and several angel investors.
Literal Labs has developed a machine learning technique that uses a combination of propositional logic, binarisation, and Tsetlin Machines to create fast, efficient, and explainable AI.
It is an AI algorithm company that uses logic-based techniques to generate custom AI models, which benchmarking studies have proven to be orders of magnitude faster, more energy-efficient and more explainable than neural networks.
Its models are for companies that want to replace GPU-heavy algorithms that are too large, expensive and energy-intensive, for companies that operate in strict social or regulatory markets in which explainability of AI is essential, or for companies needing more efficient AI models for battery-based products.
Literal Labs was spun out of Newcastle University by world leaders in logic-based AI, Dr. Alex Yakovlev and Dr. Rishad Shafik, along with company builder Cambridge Future Tech. Noel Hurley was later appointed CEO of Literal Labs in 2023, after having spent more than 20 years at Arm.
Literal Labs doubled its headcount from six to 12 in 2024, including appointing Leon Fedden – formerly AI Deep Learning platform lead at AstraZeneca – as Chief Technology Officer. The fresh injection of funding will be used to further grow its engineering team and bring its first commercial product to market later in 2025 for customers with EdgeAI.
Hurley said: “We’re at a pivotal moment for AI with adoption continuing to accelerate alongside sustainability and cost concerns. Our logic-based AI offers a new solution for those that want and need high-performing AI that is faster, more energy efficient and more explainable than what’s currently available via neural networks. This funding comes at a time when we’re ready to significantly speed up our product development and will enable us to bring our first product to market later this year.”
Northern Gritstone CEO Duncan Johnson said: “Literal Labs is Northern Gritstone’s first investment linked to Newcastle University, renowned for its technology-related research. We are delighted to support Noel Hurley and the Literal Labs team at a time when innovation can truly benefit from greater efficiency in AI.”
Mercuri partner Esha Vatsa said: “We are excited to back Literal Labs as it redefines AI with a radically efficient alternative to existing neural networks. The team, combining deep research expertise and proven industry leadership, is uniquely positioned to commercialise this innovation.”