Smart grants are for companies with innovative ideas with disruptive potential, to accelerate their journey to revenue generation. They are available to SMEs and their partners, who need public funding to accelerate their ideas into the marketplace.
We’ve recently made changes to the application form, now having fewer questions and a shorter application. We will continue to evolve the programme to maximise the impact of these grants on the UK economy.
Grants, loans, contracts and partnerships
Grant funding is non repayable public funding and is just one of Innovate UK’s tools to help companies. We also provide funding through access to:
- innovation loans
- contracts with government procurers
- partnerships with private investors.
Before looking at our funding I strongly recommend potential innovators join one of our networks, such as the Innovate UK KTN to:
- meet like-minded innovators
- make connections
- hear about upcoming funding opportunities.
Innovate UK EDGE is there to help you access business advisory services which can help you assess your readiness for grants. Our Catapults centres provide access to equipment and expertise which can help you validate your ideas.
What are Smart grants?
Smart grants is one of our most highly competitive funds. Applications must score extremely highly on all aspects to be in with a chance of securing funding. It is important to point out that Smart grants are not right for everyone.
Typically, 50% of the applications we receive aren’t right for the funding and would be much more likely to succeed by looking at our other support mechanisms first.
The assessment of applications is tough but fair. Five independent assessors are asked to score each application on:
- how technologically innovative it is
- why it is addressing a great market opportunity
- how you will deliver it, and why it’s good value for you as a business
- good value for the economy.
If so, read on to understand what Smart grants are for, to consider if they might be right for you and your innovation.
Our five question Smart funding checklist
1. Is my innovative idea right for Smart?
Unlike research and development (R&D) tax credits managed by HMRC, which are available to all businesses working on scientific or technological uncertainty, Smart grants are only for game changing ideas. By that we mean ideas that are innovative, disruptive and ambitious, that will lead to new products, processes or services.
The funding is for those who have an idea that has the potential to disrupt existing markets and incumbents. Initially perhaps in a small way, but with the potential to ultimately give a high return on investment.
It is not enough to build on what is available in the marketplace today, the idea must also have the potential to disrupt in an ambitious way. For example, if a similar product is already available in another sector then it is unlikely to justify Smart funding.
2. Is my idea at the right stage of development?
Projects should have good commercial prospects for a product, process or service, and with a realistic and effective route to market. New and novel ideas are welcome where they build on the expertise of your team and have a credible route to market.
Equally, building on outputs of academic research is welcome, and explaining why the timing is right in having a realistic route to disrupting the current market.
We’re looking for innovations that will be able to swiftly generate revenue following the completion of the grant. Either as a final product at a competitive price point, or in a small scale and pre-commercial way to test the business model.
That means innovations 10 years from market or ones requiring multiple research projects to reach their first viable product are not right for Smart. Such projects can find support through the themes detailed in our plan for action.
Smart grants can support proof of concept and development of prototypes, as well as later stage R&D up to creating first demonstrators in a real-world environment.
For technologies that are proven, but where there is uncertainty on manufacturing readiness or how to scale up volumes, an innovation loan is a better route to funding.
Where companies need support for R&D and capital to grow the business at the same time, investor partnerships are an attractive route.
3. Are we the right team to take this forward?
The team must have the necessary management and technical expertise and resources to make the project a success.
If it is a collaborative proposal, explain:
- how working together will enable you to achieve more
- how you will fill any gaps in the team
- how your academic partners are bringing new knowledge to the innovation project, if relevant.
4. Is my case for needing public funding compelling enough?
This is crucial as we are managing public money, and we need to make sure taxpayers’ money is used effectively. Smart funding must give the UK economy a return on investment.
Companies often find this the hardest question to answer as Innovate UK funding is for those who need specialist public support to overcome market failures.
Both the project and business must be financially viable and public funding must provide value for money and not simply substitute for alternative funding sources.
Smart grants provide up to 70% of the project costs, so it is the responsibility of the business to provide the remaining 30%.
The company should be able to do the R&D project. They should also have sufficient capital to develop their management team and fund activities outside of research and development. For example, Innovate UK grants can’t cover typical commercialisation activities, like sales and marketing to grow the business.
So, what makes a good case for needing public funds? Addressing market failures, for example, accelerating the timeline for getting to market to meet a window of opportunity.
Equally, some innovations will bring benefit to the UK for both those inside and outside the project. Public funding can then reduce the costs for those doing the work.
5. What does a successful project look like?
The companies we’ve supported report increases in:
- jobs created
- global distribution
- significant private investment secured and
- commercialisation of new products and services following completion of their project.
This represents a significant return on investment for taxpayer’s money given for innovation funding.
For example, Fidel API Ltd secured a single 15-month Smart grant in 2016 and launched their first product within a year. Since then, they have grown to 120+ staff, backed by multiple private investors and with global distribution deals. Fidel develops new way for consumers to be rewarded for loyalty.
To finish, we will reiterate:
- companies from any sector can apply for a Smart grant
- the scope and eligibility of Smart grant competitions are focused on supporting disruptive innovations with the potential to win and grow market share.
If you have any questions, please contact Innovate UK’s customer support on 0300 321 4357 or email email@example.com.
Find all our current funding competitions
The Innovate UK KTN good application guide (PDF, 454KB) is an excellent resource for first time applicants to Innovate UK.
Top image: Credit: alvarez, E+ via Getty Images