Investor Partnerships – digital technologies, North East: Rd 2

Key Features

UK registered SMEs can apply for grant funding for projects that grow their innovation activities in the digital technologies cluster in North East England, alongside private investment from selected investor partners.

Programme:     Innovate UK

Award:     Share of up to £1.7 million

Opens: 24th Feb 2025

Closes: 9th Apr 2025

! This scheme is closing soon

Overview

Innovate UK, as part of UK Research and Innovation, will work with North East Combined Authority to invest up to £1.7 million in innovation projects.

The projects will be led by ambitious UK registered micro, small or medium sized businesses (SMEs) who will use the funding to grow their innovation activities in the digital technology cluster in North East England, both during and after the project.

For this competition, North East England refers to the geography of the North East Combined Authority which includes Northumberland, Tyne and Wear and County Durham.

This funding is from Innovate UK’s Launchpad programme which supports the UK Government’s goals for local economic growth. This Launchpad is also supporting Innovation SuperNetwork as the local cluster management organisation.

This competition brings together:

  • Innovate UK’s expertise in identifying innovation and using grant funding to change the risk profile of businesses
  • the aligned funding and expertise of our investor partners in identifying opportunities and teams that can best use extra investment finance
  • the ambition of North East Combined Authority for innovation led growth in the digital technology cluster

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.

You must have gained a level of traction with one of Innovate UK’s investor partners. We will contact them to confirm they are likely to make an offer of investment if you have a successful application to Innovate UK.

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 demonstrate that if your project is funded, it will:

  • have significant market impact
  • be scalable
  • be attractive to equity investors

Your project must help to grow your innovation activities in the digital technology cluster in North East England, both during and after the project.

For this competition, North East of England is defined by the geography of the North East Combined Authority which includes Northumberland, Tyne and Wear and County Durham.

This could be demonstrated by:

  • your local innovation activities
  • the value that your innovation activities create in the cluster
  • your engagement with other innovation active organisations in the cluster, such as with Innovation SuperNetwork, this Launchpad’s cluster management organisation

Your application may be considered ineligible if you do not describe clearly how your main project activities and work packages meet the scope of this competition. This includes the main project activities of any subcontractors. If you do not describe how your activities in the cluster will continue after your project then you are unlikely to be offered funding in this competition.

Your project must focus on digital technologies that can be applied in growing and emerging markets.

Growing or emerging markets, include but are not limited to:

  • advanced manufacturing
  • agriculture and forestry
  • automotive and transportation
  • creative industries
  • culture, tourism, leisure and sport
  • green industries
  • health
  • offshore industries
  • retail and town centre

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

Portfolio approach

Following the independent assessment, all applications scoring over 70% will be reviewed by a panel including Innovate UK and our local partners for this Launchpad. The panel will review the applications in line with the portfolio criteria, which will inform Innovate UK’s decision on the funding awards offered.

Innovate UK want to fund a variety of projects across different criteria. We call this a portfolio approach.

Innovate UK reserve the right to prioritise projects that demonstrate:

  • more innovation activity or value creation in the cluster or outside the Greater South East of England, during and after your project
  • greater levels of traction and momentum towards completing the aligned investment in a reasonable period of time
  • the grant is making a significant impact on the investment decision
  • closer alignment to this competition’s scope and specific themes

Specific Themes

Your project can focus on one or more of the following:

Immersive technologies:

  • extended reality
  • digital twins
  • games engines
  • virtual production

Artificial intelligence:

  • data science
  • machine learning
  • neural networks
  • computer vision
  • robotics
  • large language models
  • quantum computing

This list is not exhaustive. Where you can show your proposal fits within the scope of this competition you can focus on other themes.

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
  • your 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
  • your 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
  • your project duration must be between 12 and 18 months

For all projects, your project must:

  • not start before 1 September 2025
  • end by 31 March 2027

Total project costs, detailed within your application, must not exceed the maximum project costs for your research category. If your total project costs do exceed the maximum, then your application will be made ineligible.

Your project will only be allowed to start once the aligned investment has been confirmed.

Projects must always start on the first of the month, even if this is a non-working day. You must not start your project until your Grant Offer Letter has been approved by Innovate UK. Any delays within Project Setup may mean we need to delay your project start date.

You must only include eligible project costs in your application. See our overview of eligible project costs. For specific guidance, see the eligibility section in this competition.

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 all 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
  • have sufficient capital resources to enable you to meet all your project’s eligible costs, including through the grant funding and the aligned investment

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

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

Innovate UK 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

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 cannot use non-UK based subcontractors.

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

Number of applications

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

Sanctions

This competition will not fund you, or provide any financial benefit to any individual or entities directly or indirectly involved with you, which would expose Innovate UK or any direct or indirect beneficiary of funding from Innovate UK to UK Sanctions. For example, through any procurement, commercial, business development or supply chain activity with any entity as lead, partner or subcontractor related to these countries, administrations and terrorist groups.

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.

You can use a previously submitted application to apply for this competition.

Exclusions

Innovate UK are not funding projects that are:

  • not carried out by SMEs
  • collaborative R&D projects
  • unable to demonstrate that there is potential for return on investment and growth
  • large capital infrastructure
  • not invited by one of Innovate UK’s investor partners
  • not meeting the competition eligibility or scope requirements
  • purely resulting in reports, academic papers or similar

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

Up to £1.7 million of grant funding from Innovate UK is available in this competition.

The total funding available for this Launchpad competition can change. The funders have the right to:

  • adjust the funding allocations between all Launchpad competitions and strands
  • apply a ‘portfolio’ approach

You will receive Innovate UK grant funding only if you also receive a minimum level of aligned investment, led or catalysed by your investor partner. The minimum level of investment depends on your project’s research category.

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 must always be at least equal to your grant funding request.

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 must always be at least twice as much as your grant funding request.

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.

Interested in applying for this competition?

Book an appointment to speak to one of our advisors to discuss your eligibility to apply for this Grant Funding opportunity.