Innovate UK Investor Partnerships: SME round 8

Overview

Innovate UK, as part of UK Research and Innovation, has selected a pool of investor partners.

These investor partners have demonstrated that they have the credibility, capability, capacity and appetite to invest in innovative, technology-led businesses that align with our programmes.

These programmes will focus on the future economy as described in our plan for action.

The future economy investor partnership programme brings together:

Innovate UK’s expertise in identifying innovation and using grant funding to change the risk profile of businesses
investor partners’ aligned funding and expertise in identifying opportunities and teams that can best use extra investment finance

This approach aims to provide you with support for research and development and access to the capital investment you need to develop and commercialise your innovations.

Innovate UK provides support for your investment readiness and for engaging with suitable investors through Innovate UK Business Growth and Innovate UK Business Connect. In the first instance you should contact Innovate UK Business Growth for support in understanding your readiness for investment and also to look at your wider strategy for growth.

You should also contact Innovate UK Business Connect to establish if there are specific programmes for connecting businesses in your sector to relevant investors. Support and connections to sector specific investors can also be provided by the relevant Catapults.

You will need to establish a relationship and a level of investment traction with one of our approved investor partners before you apply for funding. A full list of selected investor partners is provided at Innovate UK Investor Partners – UKRI and Innovate UK Business Connect investor partnerships websites.

The investor partner must have confirmed with you that you are in a position to apply for grant funding as you will be asked to identify them in the application.

To be successful, your project must be independently assessed by Innovate UK as fundable and receive aligned investment directly, led or catalysed by the investor partner identified in your application.

In applying to this competition, you are entering into a competitive process. This competition has a funding limit, so we may not be able to fund all the proposed projects. It may be the case that your project scores highly but we are still unable to fund it.

The funding available in this round is limited, so only three specific themes are in scope. These are Creative Catalyst and Mindset. These are described in the Scope section.

Scope

The aim of this competition is to provide you with support for research and development and access to the capital investment you need to develop and commercialise your innovations.

Your proposal must have a clear route to market, a clear link to innovation and evidence that you can create a team to deliver your proposal.

You must be:

registered in the UK as an SME by the time the award is contracted
able to complete the aligned investment led by the investor partner needed to qualify for the award, through the issue of new shares or convertible debt

You must also demonstrate that if your project is funded, it will:

have significant market impact
be scalable
be attractive to equity investors

Future Economy

The Future Economy Investor Partnership programme has committed over £87 million in grant funding across the future economy areas included in the Innovate UK plan for action.

This covers:

net zero
health and wellbeing
next generation digital technologies and technology families

Specific themes

Most of the funding for the Future Economy Investor Partnership programme has now been fully committed. The specific themes with remaining funding available are:

Mindset

The application of extended reality for digital mental health, including immersive content that could be delivered as a digital mental health therapeutic in formal healthcare settings.

Creative Catalyst

Projects within the creative industries which are underpinned by innovative digital technology, focussing on subsectors, for example animation, architecture, games, photography, publishing and radio (see Creative Catalyst 2024 scope for full subsector list).

The investor partnership website provides information on all the specific themes that have been supported through the programme including the specific themes outlined above with funding available. In the scope and specific themes questions, you must explain which theme your project relates to and why.

Your application will be considered out of scope if you do not answer this clearly.

Innovation and ideas can come from anyone and anywhere. We want to see investments unlocked for the diverse and extraordinary talent in the UK.

We encourage innovation involving communities that are typically under-represented, including:

from regions that have historically accessed lower levels of investment (outside London, Oxford and Cambridge)
ethnic minority groups
women and other marginalised genders
disabled people
people with non-traditional education backgrounds

Portfolio approach
We want to fund a variety of projects within the remaining investor partnerships specific themes of Creative Catalyst and Mindset. Where funding is limited within these specific themes, we may make a funding decision based on the project size and grant requested. We call this a portfolio approach.

We will also take into account the impact of the grant in accelerating investment and the likelihood of the investment completing within a reasonable time.

Eligibility

The eligibility criteria will depend on your research category.

For feasibility studies projects:

your total project costs must be between £50,000 and £300,000
the project duration must be between 6 and 12 months

For industrial research projects:

your total project costs must be between £100,000 and £1 million
the project duration must be between 6 and 12 months

For experimental development projects:

your total project costs must be between £250,000 and £2 million
the project duration must be 12 months

Projects must always start on the first of the month and this must be stated within your application. Your project start date will be reflected in your grant offer letter if you are successful.

You must only include eligible project costs in your application.

Under current restrictions, this competition will not fund any procurement, commercial, business development or supply chain activity with any Russian entity as lead, partner or subcontractor. This includes any goods or services originating from a Russian source.

Your organisation

This competition is open to single applicants only. To apply your organisation must:

be a UK registered micro, small or medium sized business (SME)
carry out its project work in the UK
intend to exploit the results from or in the UK
be invited to apply by your investor partner
have discussed and agreed your proposal with your investor partner before submitting your application

More information on the different types of organisation can be found in our Funding rules.

Subcontractors

Subcontractors are allowed in this competition.

Subcontractors can be from anywhere in the UK and you must select them through your usual procurement process.

You can use subcontractors from overseas but must make the case in your application as to why you could not use suppliers from the UK.

You must provide a detailed rationale, evidence of the potential UK contractors you approached and the reasons why they were unable to work with you. We will not accept a cheaper cost as a sufficient reason to use an overseas subcontractor.

All subcontractor costs must be justified and appropriate to the total project costs

Number of applications

An SME can only submit one application into this round of the competition.

Use of animals in research and innovation

Innovate UK expects and supports the provision and safeguarding of welfare standards for animals used in research and innovation, according to best practice and up to date guidance.

Any projects selected for funding which involve animals will be asked to provide additional information on welfare and ethical considerations, as well as compliance with any relevant legislation as part of the project start-up process. This information will be reviewed before an award is made.

Exclusions

Innovate UK are not funding projects that:

are not carried out by SMEs
are collaborative R&D projects
are not part of a company’s growth plan
are unable to prove there is potential for return on investment and growth
are large capital infrastructure
have not been invited by a specified investor partner

Innovate UK cannot fund projects that are:

dependent on export performance, for example giving a subsidy to a baker on the condition that it exports a certain quantity of bread to another country
dependent on domestic inputs usage, for example giving a subsidy to a baker on the condition that it uses 50% UK flour in their product

Funding Costs

You will only receive grant funding from Innovate UK if you also receive a minimum level of aligned investment that has been led by your investor partner. The minimum level of investment will depend on the research level.

Innovate UK will decide which projects are eligible and in scope to receive grant funding. The decision will be based on the assessment of your application by independent assessors. We will also take into account the impact of the grant in accelerating investment and the likelihood of the investment completing within a reasonable time.

If you are successful, you will receive grant funding to cover a proportion of the costs of your project. The project will only be allowed to commence once the agreed aligned investment has been confirmed.

Your business must have sufficient capital resources, including through investment from the investor partner and the grant funding, to enable you to meet all your project’s eligible costs.

All recipients must act commercially, and your funding request must not exceed the limits specified.

Feasibility studies and industrial research projects

For feasibility studies and industrial research projects, Innovate UK will fund:

up to 70% of eligible project costs for micro or small organisations
up to 60% for medium sized organisations

The aligned investment led by the investor partner must always be at least equal to the grant funding.

Experimental development projects

For experimental development projects Innovate UK will fund:

up to 45% of eligible project costs for micro or small organisations
up to 35% for medium sized organisations

The aligned investment led by the investor partner must always be at least twice as much as the grant funding.

For more information on company sizes, please refer to the company accounts guidance.

If you are applying for an award funded under State aid Regulations, the definitions are set out in the European Commission Recommendation of 6 May 2003.

The Future Economy Investor Partnership programme has committed over £87 million in grant funding across the future economy areas included in the Innovate UK plan for action. This funding has been focused on specific themes. Most of the funding for the original specific themes has now been fully committed.

The specific themes with remaining funding available are:

Creative Catalyst
Mindset

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