Funding competition SMEs Transforming food production: Series A Investor Partnership round 2

UK registered SMEs transforming food production towards net zero can apply for a share of up to £5 million in grant support. This must align with a series A investment. The grant funding is from the Industrial Strategy Challenge Fund.

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Competition sections

Description

Innovate UK, as part of UK Research and Innovation, will invest up to £5 million to fund innovation projects in this competition. The grant funding is from the Industrial Strategy Challenge Fund (ISCF) Transforming Food Production challenge.

We will be working with a selected pool of investor partners, who have demonstrated that they have the credibility, capability, capacity, and appetite to invest in innovative, technology-led businesses to align with our objectives in this challenge.

This aim of this competition is to support UK registered micro, small and medium-sized enterprises (SMEs) to transform food production through experimental development projects that are closer to market.

To be offered grant funding your project must:

  • be assessed as eligible for grant funding
  • be successful in demonstrating how your project meets the overall aims of the ISCF Transforming Food Production Challenge
  • have secured aligned investment with a lead investor from the pool

You can view the areas of expertise and investment preferences for the investors.

You can apply for this competition before you speak to an investor.

In addition to investment, the lead investors in the pool can provide you with commercial acumen in, for example:

  • leadership
  • market access
  • skills
  • resources

Successful UK registered SME’s will receive:

  • grant funding from Innovate UK
  • aligned investment funding from the programme’s pool of lead investors

In applying you are entering into a competitive process. This competition closes at 11am UK time on the deadline stated.

Funding type

Grant

Project size

Your project’s total eligible costs must be between £1 million and £3 million.

Who can apply

Text update 6 October 2021: the project end date has been changed to allow for an 18 month project duration.

Innovate UK are seeking SMEs with high growth potential that aspire to transform food production towards net zero emissions by 2040. To secure grant funding you must also secure investment of at least twice the amount of grant through one of the lead investors associated with this programme.

Your project

Your project must:

  • have total eligible costs between £1 million and £3 million
  • start by 1 August 2022
  • end by 31 January 2024
  • last 18 months
  • carry out all of its project work in the UK
  • intend to exploit the results from or in the UK

If your project’s total eligible costs or duration falls outside of our eligibility criteria, you must provide justification by email to support@innovateuk.ukri.org at least 10 working days before the competition closes. We will decide whether to approve your request. If you have not requested approval or your request has not been approved by us, you will be made ineligible, and your application will not be sent for assessment.

Lead organisation

To lead a project your organisation must:

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 also provide a detailed rationale, evidence of the potential UK contractors you approached and the reasons why they were unable to work with you.

We expect all subcontractor costs to be justified and appropriate to the total eligible project costs. We will not accept a cheaper cost as a sufficient reason to use an overseas subcontractor.

Number of applications

A business can only lead on one application to this competition.

Previous applications

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

We will not award you funding if you have:

Subsidy control (and State aid where applicable)

This competition provides funding in line with the UK's obligations and commitments to Subsidy Control. Further information about the UK Subsidy Control requirements can be found within the EU-UK Trade and Cooperation agreement and the subsequent guidance from the department of Business, Energy and Industrial Strategy (BEIS).

Innovate UK is unable to award organisations that are considered to be in financial difficulty. We will conduct financial viability and eligibility tests to confirm this is not the case following the application stage.

EU State aid rules now only apply in limited circumstances. Please see our general guidance to check if these rules apply to your organisation.


Further Information

If you are unsure about your obligations under the UK Subsidy Control regime or the State aid rules, you should take independent legal advice. We are unable to advise on individual eligibility or legal obligations.

You must make sure at all times that the funding awarded to you is compliant with all current Subsidy Control legislation applicable in the United Kingdom.
This aims to regulate any advantage granted by a public sector body which threatens to or actually distorts competition in the United Kingdom or any other country or countries.

If there are any changes to the above requirements that mean we need to change the terms of this competition, we will tell you as soon as possible.

Funding

Your proposal must be assessed by Innovate UK as eligible for grant funding. Projects that meet the quality threshold will be invited to attend the investor showcase event which enables you to meet the investors from our pool.

The aligned private investment must be at least twice the amount of the grant funding.

Grant funding

Innovate UK have allocated up to £5 million to fund innovation projects in this competition.

If your organisation’s work on the project is mostly commercial or economic, your funding request must not exceed the limits below. These limits apply even if your organisation normally acts non-economically.

For experimental development projects which are nearer to market, you could get grant funding for your eligible project costs of:

  • up to 45% if you are a micro or small organisation
  • up to 35% if you are a medium-sized organisation

For more information on company sizes, please refer to the company accounts guidance. This is a change from the EU definition unless you are applying under State aid.

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.

Aligned private investment

You must agree the private investment through a lead investor and reach heads of terms by 29 March 2022.

The aligned private investment:

  • must provide you with suitable capital to complete your project and grow and scale
  • can be directed for use in your company, whereas the grant is to support the project only
  • can be used to fund additional costs typically ineligible for support by Innovate UK
  • must be provided under commercial terms negotiated with the lead investor and not Innovate UK
  • The investment can be in the form of either direct equity investment or a convertible loan. It must come from a single lead investor from the pool of investors associated with this programme. The lead investor may decide to syndicate with other investors from within or outside of the pool.

Your proposal

The aim of this competition is to develop precision technologies and data driven solutions that make a significant step towards realising net zero food production systems by 2040.

Your proposal must demonstrate the ambition to finalise a late stage innovation. You must show your potential to grow and scale your business through successful negotiation of investment from a lead investor associated with the competition. You must provide a coherent project plan which integrates into your business strategy.

You must demonstrate how your project meets the overall aims of the ISCF Transforming Food Production Challenge, to:

  • help food production systems achieve net zero emissions by 2040
  • help produce food in ways that are more efficient, resilient and sustainable
  • speed up the development and use of integrated precision approaches to improve productivity in agricultural systems

We want to fund a portfolio of projects, across a variety of technologies and markets.

We will show preference to applications and investments that demonstrate greater additionality and reduced risk alongside those with a higher ratio of investment to grant.

Specific themes

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

  • the development of precision solutions and systems that will make a significant step towards net zero emissions for food production
  • improving productivity of the agricultural sector
  • stimulating the establishment of novel high value production systems
  • developing export opportunities

Research categories

We will fund experimental development projects, as defined in the guidance on categories of research.

Projects we will not fund

We are not funding projects involving:

  • equine
  • amenity horticulture
  • wild-caught fisheries
  • non-food crops

We are not funding 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
18 October 2021
Competition opens
19 October 2021
Online briefing event: register to attend
17 November 2021 11:00am
Competition closes
16 December 2021
Notification if above threshold
19 January 2022
Investor Showcase Event (optional)
29 March 2022
Deadline to reach heads of terms with lead investor
18 April 2022
Applicants notified

Before you start

You must read the guidance on applying for a competition on the Innovation Funding Service before you start.

What we ask you

The application is split into 3 sections:

  1. Project details.
  2. Application questions.
  3. Finances.

1. Project details

This section provides background for the assessors and is not scored.

Application team

You can invite people from your organisation to help complete the application.

Application details

The lead applicant must complete this section. Give your project’s title, start date and duration.

Subsidy Basis

Will the project, including any related activities, you want Innovate UK to fund, affect trade between Northern Ireland and the EU?

All participants must complete this section.

Research category

Select the type of research you will undertake.

Equality, diversity and inclusion

We collect and report on equality, diversity and inclusion (EDI) data to address under-representation in business innovation and ensure equality, diversity and inclusion across all our activities.

All participants must complete this EDI survey and the lead applicant must then select yes in the application question. The survey will ask you questions on your gender, age, ethnicity and disability status. You will always have the option to ‘prefer not to say’ if you do not feel comfortable sharing this information.

Project summary

Describe your project briefly and be clear about what makes it innovative. We use this section to assign experts to assess your application.

Your answer can be up to 400 words long.

Public description

Describe your project in detail, and in a way that you are happy to see published. Do not include any commercially sensitive information. If we award your project funding, we will publish this description. This could happen before you start your project.

Your answer can be up to 400 words long.

Scope

Describe how your project fits the scope of the competition. If your project is not in scope, it will be immediately rejected and will not be sent for assessment. We will tell you the reason why.

Your answer can be up to 400 words long.

2. Application questions

The assessors will score your answers for questions 2 to 12, question 1 is not scored. You will receive feedback for each scored question.

You must answer all questions. Your answer to each question can be up to 400 words long.

Do not include any website addresses (URLs) in your answers.

Question 1. Applicant location (not scored)

You must state the name of your organisation along with your full registered address.

We are collecting this information to understand the geographical location of all participants of a project.

Question 2. Transforming food production

How will your project improve productivity, increase sustainability and help the industry (or industry subsector) move towards achieving net zero emissions by 2040?

Describe or explain:

  • the main motivation and commercial rationale for the project
  • the business need, technological challenge or market opportunity
  • how the project output(s) will improve productivity, increase sustainability and help the industry (or industry subsector) move towards achieving net zero emissions by 2040
  • any work you have already done to respond to this need, for example if the project focuses on developing an existing capability or building a new one
  • the wider economic, social, environmental, cultural or political challenges which are influential in creating the opportunity
  • how the grant and aligned series A investment will enable you to grow and scale beyond the project

Question 3. Approach and innovation

What approach will you take and where will the focus of the innovation be?

Describe or explain:

  • how you will respond to the need, challenge or opportunity identified
  • how you will improve on the nearest current state-of-the-art identified
  • whether the innovation will focus on the application of existing technologies in new areas, the development of new technologies for existing areas or a totally disruptive approach
  • the freedom you have to operate
  • how this project fits with your current product, service lines or offerings
  • how it will make you more competitive
  • the nature of the outputs you expect from the project (for example demonstrator, know-how, new process, product or service design) and how these will help you to target the need, challenge or opportunity identified

You can submit one appendix to support your answer. It can include diagrams and charts. It must be a PDF and can be up to 2 A4 pages long and no larger than 10MB in size. The font must be legible at 100% zoom.

Question 4. Team and resources

Who is in the project team and what are their roles?

Describe or explain:

  • the roles, skills and experience of all members of the project team that are relevant to the approach you will be taking
  • the resources, equipment and facilities needed for the project and how you will access them
  • the details of any vital external parties, including subcontractors, who you will need to work with to successfully carry out the project
  • any roles you will need to recruit for

You can submit one appendix with a short summary of the main people working on the project to support your answer. It must be a PDF and can be up to 4 A4 pages long and no larger than 10MB in size. The font must be legible at 100% zoom.

Question 5. Market awareness

What does the market you are targeting look like?

Describe or explain:

  • the markets, domestic, international or both that you will be targeting in the project, and any other potential markets
  • who are your actual target customers or end users, what is the value to them, why they would use or buy your product
  • what is the structure and size of the market you are targeting and market share do you expect to obtain
  • what are the dynamics of the market, growth rates or changes in demand

Question 6. Competitors

Who else is operating in this space and how does your proposal build on and or differentiate from competitors?

Describe or explain:

  • the process you have completed to evaluate the work of competitors including those near market or in development
  • how does your proposal build on, or differentiate from competitor offerings
  • where applicable, what regulatory, cultural and or other barriers exist, both in the UK and internationally that may prevent you from fully exploiting this opportunity

Question 7. Outcomes and route to market

What are the expected outcomes of this project and how are you going to progress them to commercialisation and market?

Describe or explain:

  • the nature of the outputs you expect from the project, for example, a report, demonstrator, know-how, new process, product, or service design
  • how your expected outputs will help you to target the need, challenge or opportunity identified
  • how you propose to take the outcomes of the project forward or to market
  • how you will protect and exploit the outputs of the project, for example through know-how, patenting, or designs
  • what business models will you use

Question 8. Wider impacts

What will your project deliver and how will it meet the aims and objectives of the ISCF Transforming Food Production programme.

What impact might this project have outside the project team?

Describe and where possible, measure:

  • the environmental, sustainability and resilience benefits from the project to external parties, for example, contributing to net-zero targets for emissions and reduction of waste
  • the economic benefits from the project to external parties, including customers, others in the supply chain, broader industry and the UK economy, for example, productivity increases and import substitution
  • the social or welfare impacts from the project

Question 9. Project management

How will you manage the project effectively?

Describe or explain:

  • the main work packages of the project and the total cost of each one
  • your approach to project management, identifying any major tools and mechanisms you will use to get a successful and innovative project outcome
  • the management reporting lines
  • your project plan in enough detail to identify any links or dependencies between work packages or milestones

You must submit a project plan or Gantt chart as an appendix to support your answer. It must be a PDF and can be up to 2 A4 pages long and no larger than 10MB in size. The font must be legible at 100% zoom.

Question 10. Risks

What are the main risks for this project?

Describe or explain:

  • the main risks and uncertainties of the project, including the technical, commercial, managerial and environmental risks
  • how you will mitigate these risks
  • any project inputs that are critical to completion, such as resources, expertise or data sets
  • any output likely to be subject to regulatory requirements, certification, ethical issues and so on, and how you will manage this

You must submit a risk register as an appendix to support your answer. It must be a PDF and can be up to 2 A4 pages long and no larger than 10MB in size. The font must be legible at 100% zoom.

Question 11. Costs and value for money

How much will the project cost and how does it represent value for money for the team and the taxpayer?

In terms of the project goals, describe or explain:

  • the total eligible project costs
  • the grant you are requesting
  • how you will finance your contributions to the project
  • how this project represents value for money for you and the taxpayer
  • how it compares to what you would spend your money on otherwise
  • any subcontractor costs and why they are critical to the project

Question 12. Added value and investment requirement

What impact would an injection of public funding and secured investment have on the businesses involved?

Describe or explain:

  • whether the project could go ahead in any form without public funding and if so, the difference the public funding would make, such as a faster route to market or reduced risk
  • why you are not able to fund the project from your own resources and why you are seeking private-sector aligned investment, and what would happen if the application is unsuccessful
  • how the project would change the nature of R&D activity and subsequent ability to grow and scale
  • your activities to enhance your investor readiness
  • any existing or past investment in your business
  • any discussions underway with investors, including for this round or for future funding

You must submit a one-page investment profile as an appendix to support your answer. This must describe your investment requirements and supporting information including all of the following and any additional relevant information:

  • funding received
  • ask or use of funds
  • team
  • traction
  • problem and solution
  • market
  • business or revenue model
  • financial projections
  • contact details

This profile will be shared with all the investors associated with the Transforming Food Production Series A Investor Partnership programme. Please do not include any confidential information.

If you need help to prepare a one-page investment summary, contact the Knowledge Transfer Network (KTN) or follow their guide.

It must be a PDF and must be 1 A4 page long and no larger than 10MB in size. The font must be legible at 100% zoom.

3. Finances

The organisation must complete their own project costs, organisation details and funding details in the application. This does not include costs associated with the aligned investment.

For full details on what costs you can claim see our project costs guidance.

Background and further information

Lead investor pool

The ISCF Transforming Food Production challenge has carefully selected lead investors that:

  • are established agri-tech, food-tech, social, impact and clean growth investors
  • have demonstrated they have the necessary capability, capacity and investment appetite to achieve the ‘net zero’ objectives of the ISCF Transforming Food Production Challenge
  • have demonstrated good financial standing
  • are from the UK and overseas

Investor Showcase Event

Following assessment, projects that meet the Innovate UK quality threshold will be invited to attend the investor showcase event. You will be given the opportunity to present a 5 minute pitch and meet the investors from our pool The event will also be attended by additional invited investors.

The event will be held on 19 January 2022 at a venue in Central London. Attendance is voluntary and not a requirement to be eligible for funding, but we strongly encourage you to participate. The Knowledge Transfer Network (KTN) can provide additional support on pitch preparation.

In March 2021 an Investor Readiness Bootcamp was hosted to support successful applicants in Round 1 of this competition. The majority of this material is now available to be accessible by all applicants. This includes guidance from experts and members of the investor pool as recorded Zoom sessions and related documentation. This archive can be accessed directly by all applicants via the KTN.

Find a project partner

If you want help to find a potential investor, contact the KTN.

Support for SMEs from Innovate UK EDGE

If you receive an award, you will be contacted about working with an innovation and growth specialist at Innovate UK EDGE. This service forms part of our funded offer to you.

These specialists focus on growing innovative businesses and ensuring that projects contribute to their growth. Working one-to-one, they can help you to identify your best strategy and harness world-class resources to grow and achieve scale.

We encourage you to engage with EDGE, delivered by a knowledgeable and objective specialist near you.

Contact us

Our phone lines are open from 9am to 11:30am and 2pm to 4:30pm, Monday to Friday (excluding bank holidays).

Innovate UK is committed to making support for applicants accessible to everyone.

We can provide help for applicants who face barriers when making an application. This might be as a result of a disability, neurodiversity or anything else that makes it difficult to use our services. We can also give help and make other reasonable adjustments for you if your application is successful.

If you think you need more support, it is important that you contact our Customer Support Service as early as possible during your application process. You should aim to contact us no later than 10 working days before the competition closing date.

Need help with this service? Contact us