Future Economy Investor Partnerships SME: round 2
UK registered businesses can apply for grant funding alongside private investment from selected investor partners.
- Competition opens: Friday 12 May 2023
- Competition closes: Friday 7 July 2023 11:00am
This competition is now closed.
Competition sections
Description
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 via Innovate UK Edge and Innovate UK KTN. In the first instance you should contact Innovate UK Edge for support in understanding your readiness for investment and also to look at your wider strategy for growth.
You should also contact Innovate UK KTN to establish if there are specific programmes for connecting businesses in your sector to relevant investors. Support and connections to sector specific investors may also be provided by the relevant catapult centre.
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 KTN 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 investment directly, led or catalysed by the investor partner.
In applying to this competition, you are entering into a competitive process. The competition closes at 11am UK time on the deadline stated.Funding type
Investor Partnerships
Project size
Your project’s total costs will depend on your research category and must be between: £50,000 and £300,000 for feasibility studies; £100,000 and £1 million for industrial research; £250,000 and £2 million for experimental development.
Who can apply
This competition is open to single applicants only.
Your project
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 24 months
For experimental development projects:
- your total project costs must be between £250,000 and £2 million
- the project duration must be between 12 and 24 months
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 and Belarusian entity as lead, partner or subcontractor. This includes any goods or services originating from a Russian and Belarusian source.
If you have not provided information on the investor partner who is leading on your investment or we are unable to confirm the investment position with that investor partner, then your application will not be eligible. Your application will then not be sent for assessment.
Your organisation
To apply your organisation must:
- be a UK registered micro, small or medium sized business (SME)
- carry out its project work in or from the UK
- intend to exploit the results in or from the UK
- 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
You can only submit one application into this round of the competition.
Previous applications
You can use a previously submitted application to apply for this competition.
We will not award you funding if you have:
- failed to exploit a previously funded project
- an overdue independent accountant’s report
- failed to comply with grant terms and conditions
- a similar project that has been awarded funding in another competition
Subsidy control (and State aid where applicable)
This competition provides funding in line with the Subsidy Control Act 2022. Further information about the Subsidy requirements can be found within the Subsidy Control Act 2022 (legislation.gov.uk)
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 Subsidy Control Act 2022 or the State aid rules, you should take independent legal advice. We are unable to advise on individual eligibility or legal obligations.
You must always make sure 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.
Funding
You will only receive grant funding from Innovate UK if you also receive a minimum level of 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 and on a review of your expected investment following a discussion with your proposed investor partner.
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 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 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. 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.
Your proposal
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 raise the aligned finance needed to draw down 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 other equity investors
Broader themes
We are looking to support projects that focus on the future economy areas included in the Innovate UK plan for action. The broad theme areas are:
- net zero
- health and wellbeing
- next generation digital technologies and technology families
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 are encouraging diverse applicants and inclusive project applications, pushing beyond the status quo.
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
To support this, we also have a targeted theme on equality, diversity and inclusion (EDI).
Specific themes
The investor partnership programme will be focused on specific themes for the future economy areas that include:
Net Zero
- capital intensive technologies
- power – particularly offshore wind, civil nuclear, hydrogen, carbon capture and storage, and whole systems integration
- heating and retrofit
- mobility
- resource efficiency for materials and manufacturing
- critical circular materials
- battery technologies for transport and energy storage (Faraday Battery Challenge)
Health and Wellbeing
- innovative solutions to health and healthcare challenges (Biomedical Catalyst)
- advancing life-changing Cancer Therapeutics, focussed on immunotherapies and paediatric oncology
- 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 (Mindset)
- controlled environment agriculture and alternative proteins
Next generation digital technologies
- projects within the creative industries which are underpinned by innovative digital technology as well as sustainable innovations, such as circular fashion (Creative Catalyst)
- adoption of artificial intelligence and machine learning technologies in targeted industries (Bridge AI)
Knows No Limit (equality, diversity and inclusion)
- innovations from diverse founders or senior decision-makers that are from under-represented groups and are role models
- innovations outside of the future economy theme areas, including those that support under-served communities and groups
These programmes are described in more detail in the UKRI investor partnerships and Innovate UK KTN investor partnerships websites.
If your project is not focused on one of the specific themes above then it may be supported if it is in the future economy areas of net zero, health and wellbeing and digital and technologies as set out in the Innovate UK plan for action.
In scope and the specific themes questions, you must explain which theme your project most closely relates and why. If it does not relate to one of the specific themes, but is within the broader future economy scope, then indicate to which broader theme it relates to and why.
Your application will be considered out of scope if you do not answer this clearly.
Portfolio approach
We want to fund a variety of projects across different technologies and markets, with a particular focus on future economy areas set out in the Innovate UK plan for action. We call this a portfolio approach. We will also take into account the impact of the grant in attracting investment and the likelihood of the investment completing within a reasonable time.
Research categories
Projects we will not fund
We are not funding projects that are:
- not carried out by SMEs
- collaborative R&D projects
- not part of a company’s growth plan
- unable to demonstrate there is potential for return on investment and growth
- not working with an investor partner from the selected pool of investor partners
We 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
- 12 May 2023
- Competition opens
- 23 May 2023
- Online briefing event: register to attend
- 7 July 2023 11:00am
- Competition closes
- 21 August 2023 9:11am
- Applicants notified
Before you start
You must read the guidance on applying for a competition on the Innovation Funding Service before you start.
Before submitting, it is the lead applicant’s responsibility to make sure:
- that all the information provided in the application is correct
- your proposal meets the eligibility and scope criteria
- all sections of the application are marked as complete
You can reopen your application once submitted, up until the competition deadline. You must resubmit the application before the competition deadline.
What we ask you
The application is split into 3 sections:
1.Project details.
2.Application questions.
3.Finances.
Accessibility and inclusion
We welcome and encourage applications from people of all backgrounds and are committed to making our application process accessible to everyone. This includes providing support, in the form of reasonable adjustments, for people who have a disability or a long-term condition and face barriers applying to us. Read more on how we are making our application process more accessible and inclusive for everyone.
You must contact us as early as possible in the application process. We recommend contacting us at least 15 working days before the competition closing date to ensure we can provide you with the most suitable support possible.
You can contact us by emailing support@iuk.ukri.org or calling 0300 321 4357. Our phone lines are open from 9am to 5pm, Monday to Friday (excluding bank holidays).
1. Project details
This section provides background for your application and is not scored.
Application team
Decide which people from your organisation will work with you on the project and invite those people to help complete the application.
Application details
Give your project’s title, start date and duration.
Research category
Select the type of research you will undertake.
Project summary
Describe your project briefly and be clear about what makes it innovative. We use this section to assign the right 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 not be sent for assessment. We will tell you the reason why.
Describe if your project is aligned to any of the specific themes or whether it is within the broader scope of the future economy areas. Alignment to specific themes is not a requirement, but will form part of a portfolio approach in funding decisions.
Your answer can be up to 400 words long.2. Application questions
The assessors will score all your answers apart from question 1, 2 and 3 You will receive feedback for each scored question. Find out more about how our assessors assess.
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 and full registered address of your organisation and any subcontractors working on your project.
We are collecting this information to understand the geographical location of all applicants.
Question 2. Specific theme (not scored)
If your application relates to one of the specific themes listed in the scope section, please indicate which theme it most closely relates to and why. If it does not relate to one of the specific themes, but is within the broader future economy scope, then indicate to which broader theme it relates to and why.
Question 3. Investor partner (not scored)
Provide the name of the investor partner who you are working with.
We will contact the investor partner to confirm how the grant funding will impact the proposed investment, and the current stage of completion. This forms part of the decision of whether your application is successful.
Question 4. Need or challenge
What is the business need, technological challenge, or market opportunity behind your innovation?
Explain:
- the main motivation for the project
- whether you have identified any similar innovation and its current limitations, including those close to market or in development
- 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, such as incoming regulations
Question 5. Approach and innovation
What approach will you take and where will the focus of the innovation be?
Explain:
- how you will respond to the need, challenge or opportunity identified
- how will you improve on the similar innovation that you have identified
- whether the innovation will focus on 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 report, 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, up to 2 A4 pages long and no larger than 10MB in size. The font must be legible at 100% zoom.
Question 6. Team and resources
Who is in the project team and what are their roles?
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 must submit one appendix with a short summary of the main people working on your project to support your answer. It must be a PDF, up to 4 A4 pages long and no larger than 10MB in size. The font must be legible at 100% zoom.
Question 7. Market awareness
What does the market you are targeting look like?
Describe:
- the target markets for the project outcomes and any other potential markets (domestic, international or both)
- the size of the target markets for the project outcomes, backed up by references where available
- the structure and dynamics of the target markets, including customer segmentation, together with predicted growth rates within clear timeframes
- the target markets’ main supply or value chains and business models, and any barriers to entry that exist
- the current UK position in targeting these markets
- the size and main features of any other markets not already listed
If your project is highly innovative, where the market may be unexplored, describe or explain:
- what the market’s size might be
- how your project will try to explore the market’s potential
Question 8. Outcomes and route to market
How are you going to grow your business and increase long term productivity as a result of the project?
Explain:
- your current position in the markets and supply or value chains outlined, and whether you will be extending or establishing your market position
- your target customers or end users, and the value to them, for example, why they would use or buy your product
- your route to market
- how you are going to profit from the innovation, including increased revenues or cost reduction
- how the innovation will affect your productivity and growth, in both the short and the long term
- how you will protect and exploit the outputs of the project, for example through know-how, patenting, designs or changes to your business model
- your strategy for targeting the other markets you have identified during or after the project
Question 9. Wider impacts
What impact might this project have outside the project team?
Describe and, where possible, measure the economic benefits from the project such as productivity increases and import substitution, to:
- external parties
- customers
- others in the supply chain
- broader industry
- the UK economy
Describe and, where possible, measure:
- any expected impact on government priorities
- any expected environmental impacts, either positive or negative
- any expected regional impacts of the project
Describe any expected social impacts, either positive or negative on, for example:
- quality of life
- social inclusion or exclusion
- jobs, such as safeguarding, creating, changing or displacing them
- education
- public empowerment
- health and safety
- regulations
- diversity
Question 10. Project management
How will you manage your project effectively?
Explain:
- the main work packages of your 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, up to 2 A4 pages long and no larger than 10MB in size. The font must be legible at 100% zoom.
Question 11. Risks
What are the main risks for this project?
Describe:
- 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, and 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, up to 2 A4 pages long and no larger than 10MB in size. The font must be legible at 100% zoom.
Question 12. Added value
How will this public funding from Innovate UK and investment led by your investor partner, help you to accelerate or enhance your approach to developing your project towards commercialisation? What impact would this award have on the organisations involved?
Explain:
- what advantages public funding would offer your project, for example, appeal to investors, more partners, reduced risk or a faster route to market (this list is not exhaustive)
- the likely impact of the project outcomes on your organisation
- what other routes of investment you have already approached
- what your project would look like without public funding
- how this project would change the R&D activities of your organisation
Question 13. 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 your project goals, explain:
- your total project costs
- the grant you are requesting
- the expected investment led by the selected investor partner and the likely impact the overall funding will make to your business
- how this project represents value for money for you and the taxpayer
- how it compares to what you would spend your money on otherwise
- the balance of costs and grant across the project partners
- any subcontractor costs and why they are critical to your project
3. Finances
Each organisation in your project must complete their own project costs, organisation details and funding details in the application.
For full details on what costs you can claim see our project costs guidance.Background and further information
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 the 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 provide support for your investment readiness and for engaging with suitable investors via Innovate UK Edge and Innovate UK KTN. In the first instance you should contact Innovate UK Edge for support in understanding your readiness for investment and also to look at your wider strategy for growth. You should also contact Innovate UK KTN to establish if there are specific programmes for connecting businesses in your sector to relevant investors. Support and connections to sector specific investors may also be provided by the relevant catapult centre.
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 KTN 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 investment directly, led or catalysed by the investor partner.
Data sharing
This competition is operated by Innovate UK.
Innovate UK is directly accountable to you for its holding and processing of your information, including any personal data and confidential information. Data is held in accordance with our own policies. Accordingly, Innovate UK will be data controllers for personal data submitted during the application. Innovate UK’s Privacy Policy is accessible here.
Innovate UK complies with the requirements of GDPR, and is committed to upholding the data protection principles, and protecting your information. The Information Commissioner’s Office also has a useful guide for organisations, which outlines the data protection principles.
Find an investor partner
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 KTN 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 investment directly, led or catalysed by the investor partner.
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 Innovate UK EDGE, delivered by a knowledgeable and objective specialist near you.Next steps
If you are successful with this application, you will be asked to set up your project.
You must follow the unique link embedded in your email notification. This takes you to your IFS Set Up portal, the tool that Innovate UK uses to gather necessary information before we can allow your project to begin.
You will need to provide:
- the name and contact details of your project manager and project finance lead
- a redacted copy of your bank details
- an exploitation plan
In order to process your claims, we need to make sure that the bank details you give to us relate to a UK high street bank that is regulated by the Prudential Regulation Authority (PRA). The account must have a BACS clearing facility and be in the same company name as your application.
If you have any doubts that your bank account will not meet Innovate UK's funding criteria, you can use the sort code checker. If you input the sort code and find a tick next to the ‘BACS Direct Credit payments can be sent to this sort code’, this will give you an indication that the bank account you hold is acceptable.
Finance checks
We will carry out checks on the basis that your investment will provide you with sufficient capital alongside the grant funding to complete the project.
You must check your IFS portal regularly and respond to any requests we have sent for additional information to avoid any delays.
Failure to complete project setup may result in your grant offer being withdrawn.
Your Grant offer letter (GOL)
Once you have successfully completed project setup, we will issue your GOL.
The GOL will be made available on your IFS portal. You will not be able to start your project until:
- you have signed the GOL
- your investor partner has confirmed the investment by completing and signing an additional annex to the GOL
- the GOL and additional signed annexes have been uploaded to IFS
- we have confirmed that the investment meets the requirements of the aligned investment
Your GOL will show the start date for your project, do not start your project before this date. Any costs incurred before your start date cannot be claimed as part of your grant.
If your application is unsuccessful
If you are unsuccessful with your application this time, you can view feedback from the assessors. This will be available to you on your IFS portal following notification.
Sometimes your application will have scored well, and you will receive positive comments from the assessors. You may be unsuccessful for any of the following reasons:
- your average score was not above the funding threshold
- your project has not been selected under the portfolio approach
- we were not convinced that the grant was making a significant difference in the investment and in all likelihood the investment would have happened anyway
- you do not have sufficient traction with the investor and we doubt that the investment will complete in a reasonable period of time
- the investment has already been secured
- the selected investor partner is not taking a significant role in leading or facilitating the investment
Contact us
Need help with this service? Contact us