Funding competition SMEs transforming food production: series A investor partnership

UK registered SMEs that are 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

This competition will support UK registered micro, small and medium-sized enterprises (SMEs). The SMEs must be aspiring to transform food production through experimental development projects that are closer to market.

Your UK registered SME will receive:

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

The grant funding is from the Industrial Strategy Challenge Fund (ISCF) Transforming Food Production challenge.

You can apply for this competition before you speak to an investor. You can read the list of lead investors or find out more about how we chose the investors.

As well as investment, the lead investors in the pool can provide you with commercial acumen, such as:

  • leadership
  • market access
  • skills
  • resources

After you apply, to be offered grant funding your project must have:

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

The competition will be managed by Innovate UK, part of UK Research and Innovation. 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

The total eligible project costs you submit must be between £1 million and £3 million for experimental development.

Who can apply

We 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.

State aid

Innovate UK is unable to award grant funding to organisations meeting the condition known as undertakings in difficulty (UID). However, as per the amendment on 2 July 2020 to the General Block Exemption Regulation, we will provide funding to organisations that can prove they were not a UID on the date of 31 December 2019 but became a UID between 1 January 2020 and 30 June 2021. We will ask for evidence of this.

Your project

Your project must:

  • have total eligible costs between £1 million and £3 million
  • start by 1 October 2021
  • end by 31 March 2023
  • last 18 months

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.

Your organisation

This competition is open to single applicants only.

To apply your organisation must:

  • be a UK registered micro, small or medium-sized enterprise (SME)
  • carry out its project work in the UK
  • intend to exploit the results from or in the UK
  • be prepared to negotiate head of terms for an aligned series A investment

Subcontractors

Subcontractors are allowed in this competition and must be selected through a participant’s normal procurement process. Subcontractors can be from anywhere in the UK. If an overseas subcontractor is selected, a case must be made as to why no UK-based subcontractor can be used, including a detailed rationale, evidence of UK companies that have been approached and reasons why they were unable to do so.

We would expect subcontractor costs to be justified and appropriate to the total eligible project costs. A cheaper cost is not deemed as a sufficient reason to use an overseas subcontractor.

Number of applications

You can only apply once into 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:

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 readiness bootcamp which enables you to meet the investors from our pool. Find out more about the bootcamp activities.

The aligned private investment must be at least twice the amount of the grant funding. We will show preference to applications with a higher ratio of investment to grant.

Grant funding

ISCF has allocated up to £5 million to fund innovation projects in this competition. Your project can have total eligible costs between £1 million and £3 million.

Your funding request must not exceed the limits below. 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

This competition provides state aid funding under article 25, ‘Aid for research and development projects’, of the General Block Exemption Regulation (GBER). It is your responsibility to make sure your organisation is eligible to receive state aid.

Aligned private investment

You must agree the private investment through a lead investor and reach heads of terms by 3 June 2021.

The aligned private investment:

  • must provide you with suitable capital to complete your project and grow and scale
  • is 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

You must 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 with the 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, which are 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 are looking to fund a variety of technologies and markets.

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 only, 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

4 November 2020
Competition opens
10 November 2020
Online briefing event: register to attend
13 January 2021 11:00am
Competition closes
17 February 2021
Invitation to bootcamp investment activities
22 February 2021
First day of optional investor readiness bootcamp activities
19 March 2021
Last day of optional investor bootcamp readiness activities
3 June 2021
Deadline to reach heads of terms with lead investor
21 June 2021
Applicants notified

Before you start

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

Innovate UK is unable to award grant funding to organisations meeting the condition known as undertakings in difficulty.

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

Invite people from your organisation 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.

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.

You must complete this EDI survey and 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 give you feedback on why.

Your answer can be up to 400 words long.

2. Application questions

The assessors will score your answers. You will receive feedback from them for each one.

Your answer to each question can be up to 400 words long. Do not include any website addresses (URLs) in your answers.

Question 1. 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 2. 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 3. 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 sub-contractors, 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 4. Market awareness

What does the market you are targeting look like?

Describe or explain:

  • the markets (domestic, international or both) you will be targeting in the project, and any other potential markets
  • 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 expected rate of adoption across the industry and any impact this might have on sector productivity
  • the current UK position in targeting these markets

If your project is highly innovative, where the market may be unexplored, describe or explain:

  • the characteristics of the expected target market, for example business type, demographics, user attitudes
  • what the market’s size might be
  • how your project will try to explore the market’s potential

Question 5. 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
  • the nearest current state-of-the-art (both UK and international), including those near market or in development, and its limitations
  • how your project will improve on the nearest current state-of-the-art identified
  • what you will do during the project to incorporate new developments and monitor competitors

Question 6. Outcomes and route to market

How are you going to grow your business and increase your productivity into the long term as a result of the project?

Describe or 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 7. Outputs and 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 nature of the outputs you expect from the project (for example, know-how, new process, product or service design, prototype, or demonstrator)
  • how these outputs will help you to target the need, challenge or opportunity identified
  • the economic benefits from the project to external parties, including customers, others in the supply chain, broader industry and the UK economy, such as productivity increases and import substitution
  • the environmental benefits to external parties including customers, others in the supply chain, broader industry and the UK overall, such as contributing to net-zero targets for emissions and reduction of waste
  • how your project has met the objectives of the ISCF Transforming Food Production programme

Question 8. 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 9. 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 10. 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 sub-contractor costs and why they are critical to the project

Question 11. 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

Please provide a one-page investment profile. This should describe your investment requirements and supporting information including all of the following and anything else you think is relevant:

  • 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.

You must submit a one-page investment profile as an appendix to support your answer. 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.

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

Background and further information

Investor readiness bootcamp activities

Projects that meet the quality threshold of 70% will be invited to attend the investor readiness bootcamp which enables you to meet the investors from our pool.

We expect these to be held mostly online between 22 February and 19 March 2021. Attendance is voluntary and not a requirement to be eligible for funding but we encourage you to participate. It will prepare you for investor negotiations.

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

Extra help

If you need more information about how to apply, 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).

Enterprise Europe Network

If you are a UK SME and successful in receiving an award, you will be contacted by your local Enterprise Europe Network (EEN) Innovation Adviser. They act on behalf of Innovate UK to discuss the growth opportunities for your business. They offer bespoke business support services to help you maximise your project and business potential.

This service forms part of your Innovate UK offer under our commitment to help UK SMEs grow and scale. Please engage positively with your EEN contact so that, working together, you can determine the most appropriate form of growth support for your business

Need help with this service? Contact us