Funding competition Innovate UK Investor Partnerships: SME round 7

UK registered SMEs can apply for grant funding alongside private investment from selected investor partners.

Competition opens: Tuesday 7 May 2024
Competition closes: Wednesday 19 June 2024 11:00am

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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 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 through Innovate UK Business Growth and Innovate UK Business Connect. In the first instance you should contact Innovate UK Business Growth for support in understanding your readiness for investment and also to look at your wider strategy for growth.

You should also contact Innovate UK Business Connect to establish if there are specific programmes for connecting businesses in your sector to relevant investors. Support and connections to sector specific investors can also be provided by the relevant Catapults.

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 Business Connect 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 aligned investment directly, led or catalysed by the investor partner identified in your application.

In applying to this competition, you are entering into a competitive process. This competition has a funding limit, so we may not be able to fund all the proposed projects. It may be the case that your project scores highly but we are still unable to fund it.

The funding available in this round is limited, so only three specific themes are in scope. These are Creative Catalyst, Mindset and Cancer Therapeutics. These are described in the Scope section.

This competition closes at 11am UK time on the deadline stated in this Innovate UK competition brief. We cannot guarantee other government or third party sites will always show the correct competition information.

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.

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 making reasonable adjustments, for people who have a disability or a long-term condition and face barriers applying to us.

You can contact us at any time to ask for guidance.

We recommend you contact us at least 15 working days before this competition’s closing date to allow us to put the most suitable support in place. The support we can provide may be limited if you contact us close to the competition deadline.

You can contact Innovate UK by email or call 0300 321 4357. Our phone lines are open from 9am to 12pm and 2pm to 5pm UK time, Monday to Friday (excluding bank holidays).

Who can apply

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 15 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 15 months

Projects must always start on the first of the month and this must be stated within your application. Your project start date will be reflected in your grant offer letter if you are successful.

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 entity as lead, partner or subcontractor. This includes any goods or services originating from a Russian source.

Your organisation

This competition is open to single applicants only. To apply your organisation must:

be a UK registered micro, small or medium sized business (SME)
carry out its project work in the UK
intend to exploit the results from or in the UK
be invited to apply by your investor partner
have discussed and agreed your proposal with your investor partner before submitting your application

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

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

Use of animals in research and innovation

Innovate UK expects and supports the provision and safeguarding of welfare standards for animals used in research and innovation, according to best practice and up to date guidance.

Applicants must ensure that all of the proposed work within projects, both that in the UK and internationally, will comply with the UKRI guidance on the use of animals in research and innovation.

Any projects selected for funding which involve animals will be asked to provide additional information on welfare and ethical considerations, as well as compliance with any relevant legislation as part of the project start-up process. This information will be reviewed before an award is made.

Previous applications

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

You can make a maximum of two submissions to Innovate UK with any given proposal. If Innovate UK judges that your proposal is not materially different from your previous proposal, it will be counted towards this maximum.

If your application goes through to assessment and is unsuccessful, you can reapply with the same proposal once more.

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 the Windsor Framework 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 aligned 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. We will also take into account the impact of the grant in accelerating investment and the likelihood of the investment completing within a reasonable time.

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 aligned 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 aligned 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.

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.

The Future Economy Investor Partnership programme has committed over £87 million in grant funding across the future economy areas included in the Innovate UK plan for action. This funding has been focused on specific themes. Most of the funding for the original specific themes has now been fully committed.

The only specific themes with remaining funding available are:

Creative Catalyst - £6.8 million

Mindset - £4.4 million

Cancer Therapeutics - £607,000

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 complete the aligned investment led by the investor partner needed to qualify for 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 equity investors

Future Economy

The Future Economy Investor Partnership programme has committed over £87 million in grant funding across the future economy areas included in the Innovate UK plan for action.

This covers:

net zero
health and wellbeing
next generation digital technologies and technology families

Specific themes

Most of the funding for the Future Economy Investor Partnership programme has now been fully committed. The only specific themes with remaining funding available are:

Health and wellbeing

advancing life-changing cancer therapeutics, focussed on immunotherapies and paediatric oncology (Cancer Therapeutics)
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)

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)

The investor partnership website provides information on all the specific themes that have been supported through the programme including the specific themes outlined above with funding available. In the scope and specific themes questions, you must explain which theme your project relates to and why.

Your application will be considered out of scope if you do not answer this clearly.

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

Portfolio approach
We want to fund a variety of projects within the remaining investor partnerships specific themes of Creative Catalyst, Mindset and Cancer Therapeutics. Where funding is limited within these specific themes, we may make a funding decision based on the project size and grant requested. We call this a portfolio approach.

We will also take into account the impact of the grant in accelerating investment and the likelihood of the investment completing within a reasonable time.

Research categories

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

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 prove there is potential for return on investment and growth
large capital infrastructure
not invited by a specified investor partner

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

7 May 2024: Competition opens
8 May 2024: Online briefing event: watch the recording
19 June 2024 11:00am: Competition closes
7 August 2024: 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 four sections:

Project details.
Application questions.
Finances.
Project Impact.

Accessibility and Inclusion

You can contact us at any time to ask for guidance.

You can contact Innovate UK by email or call 0300 321 4357. Our phone lines are open from 9am to 12pm and 2pm to 5pm UK time, 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 how your project is aligned to one of the specific themes with remaining funding. These are Creative Catalyst, Mindset and Cancer Therapeutics.

Your answer can be up to 400 words long.

2. Application questions

The assessors will score all your answers apart from questions 1 to 4. You will receive feedback for each scored question. Find out more about how our assessors assess and how we select applications for funding.

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. Animal testing (not scored)

Will your project involve any trials with animals or animal testing?

You must select one option:

We will only support innovation projects conducted to the highest standards of animal welfare.

Question 3. Specific theme (not scored)

You must describe how your project is aligned to one of the specific themes with remaining funding. These are Creative Catalyst, Mindset and Cancer Therapeutics.

Question 4. 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 5. Need or challenge

What is the business need, technological challenge or market opportunity behind your innovation?

Explain:

the main motivation for the project
the business need, technological challenge or market opportunity
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 6. 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 two A4 pages long and no larger than 10MB in size. The font must be legible at 100% zoom.

Question 7. 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 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. This can include a short summary of the main people working on the project to support your answer. It must be a PDF, up to four A4 pages long and no larger than 10MB in size. The font must be legible at 100% zoom.

Question 8. Market awareness

What does the market you are targeting look like?

Explain:

the target markets for the project outcomes, 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 9. 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?

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

If there is any research organisation activity in the project, describe:

your plans to spread the project’s research outputs over a reasonable timescale
how you expect to use the results generated from the project in further research activities

Question 10. Wider impacts

What impact might this project have outside your organisation?

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 11. Project management

How will you manage your project effectively?

Explain:

the main work packages of your project, indicating the lead partner assigned to each 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 two A4 pages long and no larger than 10MB in size. The font must be legible at 100% zoom.

Question 12. Risks

What are the main risks for this project?

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 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 two A4 pages long and no larger than 10MB in size. The font must be legible at 100% zoom.

Question 13. Added value

How will this public funding 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 would public funding offer your project, for example, appeal to investors, more partners, reduced risk or a faster route to market,
the likely impact of the project outcomes on the organisations involved
what other routes of investment have you already approached
what your project would look like without public funding
how this project would change the R&D activities of all the organisations involved

Question 14. 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
how each partner will finance their contributions to your 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 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. You can also view our Application Finances video.

4. Project Impact

This section is not scored but will provide background to your project.

Each partner must complete the Project Impact questions before being able to submit the application.

More information can be found in our Project Impact guidance and by viewing our Impact Management Framework video.

Innovate UK complies with the requirements of UK GDPR and the Data Protection Act 2018, and is committed to upholding data protection legislation, and protecting your information in accordance with data protection principles.

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 Business Growth and Innovate UK Business Connect.

In the first instance you should contact Innovate UK Business Growth for support in understanding your readiness for investment and also to look at your wider strategy for growth.

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

The Information Commissioner’s Office also has a useful guide for organisations, which outlines the data protection principles.

Find an 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 Business Growth. 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 Business Growth, delivered by a knowledgeable and objective specialist near you.

Assessment

Your application will be reviewed by five independent assessors based on the content of your application and their skills or expertise relevant to your project. All of the scores awarded will count towards the total score used to make the funding decision unless you are notified otherwise.

You can find out more about our assessment process in the General Guidance.

Your submitted application will be assessed against these criteria:

Future Economy Investor Partnership SME Round 7 - Assessor Guidance.pdf (opens in a new window)

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 Innovation Funding Service (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 for us to process your claims, you must make sure you have a valid UK business bank account. It can take several weeks for a new account to be created if required. We recommend starting this process as early as possible to avoid any delays to your project start date.

The bank account which grant is to be paid into must:

be a business account in the same name as the organisation listed in IFS
be from a UK bank regulated by the Prudential Regulation Authority (PRA)
have a cheque and credit clearing facility

Online accounts are eligible as long as they meet the above criteria.

Innovate UK will accept most banking societies apart from:

Viva Wallet
Intesa Sanpaolo
Equals Money UK Limited

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 to make sure you are an established company with access to the funds necessary 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

Once approved we will send you an email with permission to start your project on your confirmed start date. You must not start your project before the date stated on your email and GOL. Any costs incurred before your agreed start date cannot be claimed as part of your grant.

If your GOL is approved on or before the fifteenth of the month it will be dated from the first of that month. If your GOL is approved after the fifteenth, it will be dated the first of the next month.

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

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

Our phone lines are open from 9am to 12pm and 2pm to 5pm UK time, Monday to Friday (excluding bank holidays).

Innovate UK or any of our partners will not tolerate abusive language in any written or verbal correspondence, applications, social media or any other form that might affect staff.

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