Sarat Pediredla and Alan Morris, formerly CEO and CTO of hedgehog lab, launch LevelFive in Newcastle today.
The new AI-native digital product studio opens for business with a single ambition: to be a meaningful part of the productivity gain AI is set to bring British and global business in the decade ahead.
Pediredla and Morris are betting that AI-native delivery has changed the maths of building software enough to make a different shape of consultancy possible. Small, senior, agentic teams shipping production software on fixed budgets, they argue, are the next default.
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LevelFive opens with no time tracking, no published day rates, and no junior pyramid. Every engagement is sold on a fixed budget for a defined outcome and delivered, in production, in eight to twelve weeks. AI agents are built into delivery, and LevelFive runs its own commercial & delivery back office on Helix, an in-house agentic operating system.
The McKinsey Global Institute reported in November 2025 that AI agents could perform tasks accounting for 44% of US work hours at current capability, and that AI and robotics together could generate around $2.9 trillion in annual US economic value by 2030. Sequoia Capital frames the prize as a services market worth as much as $10 trillion, work that has historically sat in human labour budgets rather than software budgets. In late May 2026 Salesforce reported that agentic AI tools lifted the value of code its engineers shipped by 151% in a year, with incidents falling, and let one team finish a 231-person-day migration in 13 days.
An older economic argument sits behind the numbers. When AI makes software cheaper to build, more software gets built, not less. It is the Jevons paradox, first observed when 19th-century engines became more efficient and coal consumption rose. LevelFive is built to be part of the productivity gain that follows for British and global business.
Pediredla, who co-founded and built hedgehog lab from two people to a global business across the UK and Europe over nineteen years, calls the launch the clearest commercial opening he has seen in two decades.
“Mid-market clients have been asking for fixed-price outcomes for as long as we have been selling them digital services. Our industry has always said no, because the uncertainty and risk of building software made fixed prices impossible to commit to,” said Pediredla. “AI-native delivery is what finally changes that. We can ship in eight to twelve weeks what used to take six months, price the outcome instead of the days, and both sides come out better. That is not a marginal improvement, it is a different business. I have not seen a commercial opening this clean in twenty years.”
Morris, the engineering co-founder and former CTO of hedgehog lab, has spent twenty years in production software, most recently in agentic delivery for the healthcare industry.
“AI is the next generational shift in technology after cloud and mobile,” said Morris. “A senior engineer’s value is in knowing what to build, and how to build it, gained through years of experience solving problems across domains. Agents multiply that experience to unlock a step change in both productivity and quality, letting two senior engineers ship faster than whole teams once did. The interesting questions move up the stack: which decisions belong to a senior human, which belong to an agent. That is the opportunity for builders who join us, and for the clients we ship for.”
LevelFive prices the outcome and absorbs the risk. If the studio builds a piece of software faster with AI, it keeps the margin. If a piece of work overruns, the cost sits with LevelFive, not the client. Pediredla calls it skin in the game. “Listing ‘AI implementation’ as a service in 2026 is like a carpenter listing ‘using tools,'” he adds. AI is built into every engagement at LevelFive, not sold as a separate line.
LevelFive’s focus is mid-market businesses and private equity-backed companies. Quality is still the top priority for these buyers, but they no longer have twelve months to wait for an MVP, the pair note. AI-native delivery makes both possible at once.
Pediredla and Morris are building LevelFive as a prototype for what they believe most digital product studios will look like by 2030: Small, senior, agentic, and priced on the outcome. The bigger goal is to help raise productivity across British and global business as AI compounds what small teams can build. The company is headquartered in Newcastle, with senior associates across the UK.
