Innovate UK Investor Partnerships: Investor Selection April 2024

We are seeking investor partners who want to invest in high growth potential micro, small and medium-sized enterprises (SMEs).

Your organisation must be an investor or be able to demonstrate that you can directly facilitate investment.

To be selected you must demonstrate that you:

• are a credible investor, or can facilitate investment, with a clear investment strategy aligned to the Innovate UK plan for action for the future economy and have the ability to generate returns and add value to your portfolio businesses beyond financial support
• have the capacity to invest in companies that are successful in their application to the investor partnerships programme
• either have the capacity to follow your investment or to encourage other investors to fund further rounds of investment as and when required
• have the capability to successfully transact investments and manage your portfolio
• are in a position to lead the investment

SMEs will be able to apply for grant funding for a proportion of their eligible project costs, aligned with your investment into the business, through a series of competition rounds.

The process for identifying and assessing SMEs is described in the competition brief for each round of the future economy investor partnership programme. In all cases it will require the SME to apply through our Innovation Funding Service to a specific competition.

The SME’s application will need to demonstrate that it falls within the scope of the future economy investor partnership programme, including within specific areas of focus where we have availability of funding in each round.

Innovate UK has allocated up to £80 million to fund innovation projects in the current Spending Review period, aligned with investment from investor partners. Funding has been offered through regular rounds of the SME competitions from July 2022 and will continue through to July 2024.

This competition does not provide funding to the applicant investor. It is our ambition to seek further funding in the next Spending Review to enable us to deliver programmes in the future.

Potential SME applicants will be able to apply for grant funding for:

• feasibility studies, which can have eligible project costs from £50,000 to £300,000, can last between 6 and 12 months and will have grants of up to 70%, with at least the same amount of aligned investment from or led by an investor partner
• industrial research projects, which can have eligible project costs from £100,000 to £1 million, can last between 6 and 15 months and will have grants of up to 70%, with at least the same amount of aligned investment from or led by an investor partner
• experimental development projects, which can have eligible project costs from £250,000 to £2 million, can last between 12 and 15 months and will have grants of up to 45% for micro and small businesses or up to 35% for medium sized businesses, with at least twice the amount of aligned investment from or led by an investor partner

Investor partnerships are aimed at supporting SMEs that seek support for R&D projects through Innovate UK grant funding and that also seek aligned investment from investor partners.

To be an investor partner, you must demonstrate credibility, capability, capacity, commitment and alignment of interest to the scope of the investor partnerships future economy programme

SME projects must lead to new products, processes or services that are significantly ahead of others currently available or propose an innovative use of existing products, processes or services. It can also involve a new or innovative business model.

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

We also have a targeted theme on equality, diversity and inclusion (EDI).

The investor partnership programme is currently 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
• critical circular materials
• battery technologies for transport and energy storage (Faraday Battery Challenge)
• mobility
• resource efficiency for materials and manufacturing
• heating and retrofit

Health and Wellbeing

• innovative solutions to health and healthcare challenges (Biomedical Catalyst)
• 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)
• projects underpinned by artificial intelligence and machine learning which boost business productivity in four target industries
• projects underpinned by artificial intelligence and machine learning which boost business productivity in internal business processes
• projects that accelerate the adoption of trusted and responsible AI technologies by reducing bottlenecks during development and deployment of these technologies (BridgeAI)

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

All of these are described in more detail on the Investor Partnership website.

Innovate UK Business Connect will hold a briefing for potential investor applicants on Thursday 18 April, 2-4pm: click here to register for a place.

For further details and enquiries, visit the Investor Partnership website or contact Innovate UK Business Connect’s Investment team.