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

Investors can apply to partner with Innovate UK to align their investments with up to £5 million grant funding in UK registered SMEs to transform food production towards net zero by 2040. This funding is from the Industrial Strategy Challenge Fund.

Start new application

Or sign in to continue an existing application.

Competition sections

Description

Innovate UK, as part of UK Research and Innovation, is inviting investors to partner with us for this Transforming Food Production Series A Investor Partnership Programme. Together we will align Innovate UK’s grant funding of relevant late stage R&D projects alongside your investment in UK micro, small and medium-sized enterprises (SMEs) concerned with transforming food production.

We are seeking investor partners that are looking to invest in high growth potential SMEs that aspire to transform food production towards net zero emissions. The SMEs will be selected in a concurrent competition.

The aim of this programme is to encourage investment in innovative companies with developed technologies that are working towards net zero emission productive food systems. Investor partners must provide wider business skills and experience as well as financial investment.

The Transforming Food Production Series A Investor Partnership Programme consists of 2 competitions:

  1. This investor partner selection competition, which collates and assesses applications from investors to form an investor pool. This competition is not offering any funding.
  2. The SME competition, which opens on 18 October 2021. This will be for SMEs to submit project applications for grant support with a clear alignment for private investment.

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

Funding type

Investor Partnerships

Project size

This competition is not offering any funding.

Who can apply

We are seeking investor partners that want to invest in high growth potential SMEs that aspire to transform food production towards net zero emissions. The SMEs will be selected in a parallel competition.

Your organisation must be an equity provider with the potential to act as lead investor in Series A investments from £1 million to £5 million. Equity providers that are a charity or a trust are also eligible.

We aim to establish a ‘pool’ of lead investor partners, interested in making investments aligned with Innovate UK grants. Investments must be either direct equity or convertible loans.

You must also be able to offer other commercial acumen to SMEs, for example:

  • leadership
  • market access
  • skills
  • resources

No funding commitment is required at this stage. We only need your commitment to review and consider project proposals that will be selected by Innovate UK in the SME competition opening on 18 October 2021.

You must be able to demonstrate that your organisation is of good financial standing.

We are looking for a mix of established agri-tech investors alongside food-tech, social, impact and clean growth investors from the UK and overseas.

Your organisation must demonstrate it has the capability, capacity and investment appetite to fund individual SMEs that aim to achieve the ‘net zero’ objectives of the ISCF Transforming Food Production Challenge.

We are particularly interested in investors who:

  • are willing to act as sole investor in Series A investments or be the lead investor where additional co-investment is required (co-investors can be from within or from outside of the pool being formed)
  • are prepared to deploy Series A financing with a patient and long-term view
  • can follow their investment and potentially provide more financing when required
  • can commit to helping the SMEs with international aspirations to grow and scale up
  • have relevant sector or technology-specific expertise or social impact priorities around resilient and environmentally sustainable food production

How investors are selected

The process for becoming an investor partner is selective. Applications will be assessed by independent assessors and considered by Innovate UK’s TFP Investor Selection Panel.

By submitting an application to become an investor partner, you agree to be bound by the additional terms and conditions of the memorandum of understanding which is available to view in question 2 of the application. Each successful applicant will be required to sign the memorandum of understanding before participation in the scheme, no later than 18 January 2022.

Previous applications

You cannot use a previously submitted application to apply for this competition.

Subsidy control (and State aid where applicable)

No grant funding will be allocated to Investor partners. The associated SME phase of this programme 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.

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

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

Your proposal

Investor partnership opportunity

Innovate UK, part of UKRI, have allocated up to £5 million to provide grant funding for SME projects aligned with private investment from investor partners.

During the SME competition, SMEs will identify their total funding requirement which will include Innovate UK grant funding aligned with Series A investment.

If your organisation is selected to be an investor partner we will identify potential UK micro, small and medium sized enterprises (SMEs) for you to invest in.

These can be:

  • new investments for your organisation
  • opportunities currently under consideration by you
  • SMEs already in your portfolio who are looking for further investment and grant funding for a specific project

The SMEs seeking support will be required to carry out projects that meet the objectives of the Transforming Food Production Challenge.

These are:

  • the development of precision solutions and systems that make a significant step towards net zero emissions for food production
  • improving productivity of the agricultural sector.

SME selection process

The SME competition opens on 18 October 2021, with a closing date of 17 November 2021. Innovate UK will assess each project application using our independent pool of expert assessors and rank the assessed applications as fundable and non-fundable.

We will notify the pool of investors on 16 December 2021 which SMEs have projects with the potential to be funded. The SMEs will be required to secure aligned investment led by an investor partner before they can be potentially awarded Innovate UK grant funding.

Lead investor partners will be expected to undertake their normal discussions and due diligence with SMEs of interest. We will only offer aligned grant funding to SMEs that reach heads of terms with investor partners by 29 March 2022.

We expect that funded SMEs will be ready to start their projects as soon as investment has been confirmed in writing and after we have completed project finance checks.

SME project requirements

SME projects must start no later than 1 August 2022. Projects must have a duration of 18 months.

Total eligible project costs submitted by the SME must be between £1 million and £3 million.

Innovate UK grant funding will support experimental development projects which are nearer to market. SMEs could get grant funding for their eligible project costs of:

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

If we select you as an investor partner you will be required to lead the aligned investment into your selected SMEs. Your investment must be at least twice the amount of the Innovate UK grant. The investment should provide suitable capital to the SME, alongside the grant, to allow them to complete their project and enable the SME to grow and scale.

The investment can be in the form of either direct equity investment or convertible loans. It can come from:

  • a single investor partner
  • a lead investor partner syndicating with other investors from within or outside of the pool

We want to fund a portfolio of projects, across a variety of technologies, markets, technological maturities and research categories.

18 October 2021
Competition opens
19 October 2021
Online Briefing event – register to attend
10 November 2021 11:00am
Competition closes
16 December 2021
Applicants notified
18 January 2022
Deadline to return MOU
19 January 2022
Investor Showcase Event (Invite only)

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 2 sections:

  1. Project details.
  2. Application questions

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.

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.

Investor summary

Describe your organisation, including:

  • what type of investor you are, for example venture capital, angel network or corporate venture
  • the model by which your organisation operates its investment activities
  • whether you are regulated and if so who the regulator is
  • your preferred form of investment, such as ordinary or preferred equity, convertible loan notes or other structures
  • the maximum amount you typically invest in any one portfolio company and the total amount of investment you are likely to make each year

Your answer can be up to 400 words long.

Public description

SMEs will be encouraged to identify and contact suitable investors from the pool during their application process. Therefore, please provide a description of your organisation that can be published on our website for interested SMEs.

You must include:

  • a dedicated email address that SMEs can contact you on
  • your website
  • your investment criteria
  • the value you can add to investee SMEs

Your answer can be up to 200 words long.

2. Application questions

Text update 14 October: we have changed question 2 to make it clearer.

The assessors will score your answers to questions 3 to 6. You will receive feedback from them for each one. Questions 1 and 2 are not scored.

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

Question 1. Your financial standing (not scored)

The Innovate UK credit and risk team will carry out an assessment of your organisation’s financial standing before we decide whether to invite you to join the investor partnership programme.

Describe or explain:

  • the financial position of relevant entities involved in your investment activities, including providing financial statements for the past 3 years
  • the assets under management of relevant entities involved in your investment activities for the past 3 years, including at the time of submission of your application
  • where 3 years of historic financial statements or assets under management are not available, provide the most recent available information (including management accounts where appropriate)
  • the regulatory status or authorisations of relevant entities involved in your investment activities
  • any investment by public sector entities in your assets under management, for example investment by the British Business Bank through its Enterprise Capital Funds programme or by British Business Investments through its Regional Angels Programme

Your answer can be up to 500 words.

You must upload a copy of your financial statements and your assets under management to support your answer. These can be in up to 3 PDF documents. Each document can be up to 20 A4 pages long and no larger than 10MB in size. The font must be legible at 100% zoom.

Question 2. Memorandum of understanding (not scored)

You must download and review the memorandum of understanding (MoU). You must be prepared to sign this final version before 18 January 2022, if selected to participate.

You do not need to sign the MoU prior to submitting your application, however if you are happy to sign it at this stage, please upload the signed document. If you are not ready to sign it yet, you can upload a blank document.

You must write signed or unsigned in the text box.

Question 3. Your credibility as an investor

This question is scored out of 25.

You must demonstrate your credibility as an investor.

Describe or explain your investment strategy, including:

  • the sectors you prefer to invest in
  • any geographic constraints
  • the minimum and maximum amount of investment you typically make in each company, and the amount of investment you expect to make in each company in this investor partnerships programme
  • your historic and planned period of holding an investment
  • your approach regarding leading investments or syndicating with other investors, with examples of deals completed alongside other funders
  • how you encourage diversity (for example in terms of age, gender or ethnicity) among companies seeking investment from you
  • your knowledge of the early-stage and Series A investment market, specifically investing in technology disruptive businesses

This list is not exhaustive.

Describe or explain how you add value to your portfolio companies beyond financial support, including for guidance only:

  • the expertise you can bring to actively build value in a business, including the development of business skills, recruitment, supply chain development and market access
  • your approach to board appointments, both in relation to representing your organisation and executive management
  • how portfolio companies have benefitted from your network in terms of increasing management capability
  • your approach to exit planning, with examples of successful and less successful exits and lessons learned

Your answer can be up to 500 words.

You can submit up to 3 appendices to support your answer. They must be PDFs and can be up to 20 A4 pages long and up to 10MB in size. The font must be legible at 100% zoom.

Question 4. Your capacity for investment

This question is scored out of 25.

You must provide a summary explaining the amount of capital you have available for investment and how this will be deployed.

Describe the size, investment period, percentage deployed to date and follow-on expectations of your capital available for investment. Include, where appropriate:

  • allocated capital from your balance sheet
  • the amount of capital you expect to make available for aligned investment in investor partnerships programmes
  • your sources of funding and your investor base
  • the amount of funds that you expect to be deployed into new investments and into follow-on funding over the next 2 years
  • your track record in supporting portfolio companies with follow-on funding
  • in the last year: the volume of introductions, the conversion rate and time taken from introduction to completion

Your answer can be up to 500 words.

You can submit up to 3 appendices to support your answer. They must be PDFs and can be up to 20 A4 pages long and no larger than 10MB in size. The font must be legible at 100% zoom.

Question 5. Your capability as an investor partner

This question is scored out of 25.

You must demonstrate your capability as a lead investor.

Describe your approach to transacting investments, including:

  • your involvement to date with companies who have received funding from Innovate UK
  • your decision making and governance processes in relation to committing funding to new investments and follow-on opportunities
  • your approach to diligence, for example, whether this is internal or external and the type of diligence you typically undertake
  • the experience of the individuals tasked with the leadership and execution of the investment strategy in your organisation, including any current responsibilities outside of your organisation and the time allocated to each, you can include short CVs as an appendix
  • any ‘key individuals’ in relation to the operation of your organisation, explaining how the organisation would mitigate against a prolonged absence or inability to perform their duties
  • your approach to portfolio management, including the level of engagement with portfolio companies, available resources, the ratio of portfolio companies to investment professional or portfolio manager
  • your approach to investor reporting, including your reporting tools and processes

This list is not exhaustive.

Your answer can be up to 500 words.

You can submit up to 3 appendices to support your answer. They must be PDFs, up to 20 A4 pages long and no larger than 10MB in size. The font must be legible at 100% zoom.

Question 6. Your alignment to the Transforming Food Production Investor Partnerships programme

This question is scored out of 25.

What is your interest in the Transforming Food Production Investor Partnerships and how might your investment strategy change because of this Series A programme?

Describe or explain:

  • your interest in this challenge area and why you believe it is an exciting area for investment
  • the specific areas that you are potentially interested in investing in
  • details of existing investments in or closely aligned to this area
  • your anticipated activity in this area
  • how you will use this programme to access new opportunities and why the programme will make a difference
  • team members with specific experience relating to the transforming food production challenge
  • your experience of investing in companies that have demonstrated their ability to grow and scale and contribute to the UK economy, including through exporting into new markets

Your answer can be up to 500 words.

You can submit up to 3 appendices to support your answer. One appendix can describe any relevant investment portfolio. They must be PDFs and can be up to 20 A4 pages long and no larger than 10MB in size. The font must be legible at 100% zoom

Background and further information

The Transforming Food Production Series A Investor Partnership Programme aims to provide simultaneous grant funding and venture capital investment in UK registered SMEs to support late stage R&D projects and business growth.

Innovate UK is now in a position to offer equity providers (including charities or trusts) the opportunity to join us and become investor partners on the Series A Investor Partnership

Find a project partner

If you want help to find a potential SME applicants, contact the KTN

Contact us

If you need more information about how to apply or you want to submit your application in Welsh, email support@innovateuk.ukri.org or call 0300 321 4357.

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