Literal Labs Raises £4.6M Pre-seed Round to Develop Energy-efficient Logic-based AI Worldwide

Literal Labs, the logic-based AI algorithm company led by ex-Arm VP Noel Hurley, today announces that it has raised £4.6M ($6.2M USD) in pre-seed funding. The round is led by Northern Gritstone, the science and tech-focused investment firm from Northern 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 is pioneering logic-based AI models that are orders of magnitude faster, more energy efficient and more explainable than today’s neural networks. Its approach is inspired by the work of Mikhail Tsetlin; a mathematician and contemporary of John Macarthy who pioneered neural networks.

Like neural networks, the Tsetlin machine can perform complex machine learning training. However, unlike neural networks, it is based on propositional logic which makes it more efficient in terms of computation and energy usage, whilst speeding up inferencing.

Recent MLPerf Anomaly detection benchmarking shows Literal Labs can achieve 54x faster inferencing than “classic techniques” for machine learning applications, with 52x less energy consumption than equivalent neural networks. It also achieved 250x faster performance than XGBoost for machine learning applications.

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 where he led its product marketing as well as its CPU division – which accounted for over 70% of revenue, totalling approximately $1bn.

Literal Labs doubled its headcount from 6 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 who need to:

• Replace GPU-heavy algorithms which are too large, expensive or energy-intensive
• Operate in strict social or regulatory markets, in which explainability of AI is essential
• Have more efficient AI models for battery-based products

Noel Hurley, CEO of Literal Labs, 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.”

Duncan Johnson, CEO of Northern Gritstone, 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.”

Esha Vatsa, Partner at Mercuri 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.”

About Literal Labs

Literal Labs 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.

The company was spun out of Newcastle University by world leaders in logic-based AI, Dr. Alex Yakovlev and Dr. Rishad Shafik, and is led by former Arm CPU division VP and semiconductor startup founder, Noel Hurley. Read more at https://www.literal-labs.ai.

About Northern Gritstone

Northern Gritstone is an investment company, dedicated to supporting ambitious science and technology businesses in the North of England. Its philosophy is ‘profit with purpose’ combining strong returns for investors with wider positive, societal and economic impact, including high-skilled job creation and regional growth. Active since May 2022, the company has made 37 investments to date in some of the UK’s most exciting future businesses including semiconductor design and manufacturing; novel materials; secure computing; AI; healthtech; and gene therapies.

Together with NG Innovation Services, Northern Gritstone offers ‘Capital+++’ connecting early-stage company founders with funding and expertise to scale their businesses.

In April 2025, Northern Gritstone announced that it had raised further funding bringing its total committed capital to £362 million.

About Mercuri

Mercuri is an early-stage venture capital fund that leads pre-seed and seed funding rounds for UK technology companies. The firm is dedicated to backing outstanding entrepreneurs who are at the forefront of developing tech-driven products designed for the new age of enterprise and the digital lifestyle of the consumer.

For more information, please go to: https://www.mercuri.vc/

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