Innovate UK

Innovate UK is the UK's innovation agency and part of UK Research and Innovation (UKRI). It funds business-led research and development through competitions, loans and partnerships with universities. For a UK startup it is the main source of non-dilutive public money, but it is in the middle of a redesign, and several familiar routes have closed or paused. This page describes what UKRI and Innovate UK published as of 26 October 2026.

The routes at a glance

Competitions on the Innovation Funding Service

Most Innovate UK money is awarded through competitions published on the Innovation Funding Service (IFS), the online system where you find a competition, read its brief and apply. Each competition sets its own scope, eligibility, project size, duration and deadline, so the brief is the document that governs. A few general rules from Innovate UK's guidance apply across most of them:

• Business-led. Innovate UK largely requires projects to be led by businesses. Universities, research organizations and charities usually take part as partners.
• Collaboration rules. Where a competition requires collaboration, no single partner may account for more than 70% of the eligible project costs.
• Research categories. Projects are classed as feasibility studies, industrial research or experimental development. The share of your costs the grant covers depends on that category and on the size of your business (micro, small, medium or large, counting any parent or group), and is set out in each brief.
• Research partners. Academic institutions doing non-economic research can be funded at 80% of full economic cost; other qualifying research organizations at up to 100% of eligible costs.
• Subsidy control. Grants are subsidies under the Subsidy Control Act 2022. Some awards are made as Minimal Financial Assistance, which has its own cumulative cap, so keep a record of all public support you receive.

Innovate UK also runs Contracts for Innovation (funded procurement contracts where a public body buys development of a solution), investor partnership programs (grants offered alongside private equity investment in the same company), and thematic programs such as the Biomedical Catalyst with the Medical Research Council. Each appears on the IFS or the UKRI Funding Finder when open.

A grant pays a percentage of eligible costs and is paid against grant claims made during the project; costs incurred before the agreed start date cannot be claimed. The company must fund its own share, and its spending between claims. Budget for this before you apply: a grant can strain a startup's runway even as it adds money.

Smart grants: closed

Smart grants were Innovate UK's open competition: any sector, any game-changing idea, rolling rounds. They were popular with startups because they did not require a project to fit a predefined theme. UKRI's Smart grants guidance page now says that Smart grants are closed for new applications as funding is aligned to Innovate UK's new strategic direction. UKRI published a final impact evaluation of the program, covering 2019–20 to 2024–25, on 14 July 2026.

No like-for-like replacement has been announced. Innovate UK's stated direction is to back high-potential businesses in the UK government's Industrial Strategy priority sectors over the long term rather than fund one-off projects, and Velocity is the vehicle for that. If your company was planning a Smart grant application, look instead for a themed competition on the IFS that fits your project, and register for Innovate UK updates on Velocity.

Velocity: the planned new model

According to UKRI's Velocity page (last updated 26 October 2026):

• Velocity will open for applications in autumn 2027, and all Innovate UK support will be offered through it once it launches.
• It will be for businesses in six Industrial Strategy priority areas: advanced manufacturing, clean energy, creative industries, defence, life sciences, and digital and technologies (which includes artificial intelligence, advanced connectivity, cybersecurity, engineering biology, semiconductors and quantum).
• Accepted businesses will get, through a single application, a tailored package that can include Innovate UK funding, expert insight, growth coaching, networks, investor connections and international opportunities.
• Innovate UK will look for businesses with genuine potential to grow and signs that the potential is being realized.

UKRI has not published eligibility tests, funding amounts or application questions for Velocity on that page. Do not rely on secondhand descriptions; wait for the official guidance.

Innovation loans

Innovation loans are for micro, small and medium-sized businesses with late-stage R&D projects that have a clear route to commercialization. They are debt, not grants. According to Innovate UK Business Connect's program page, checked on 26 October 2026:

• Loans range from £100,000 to £5 million and can cover up to 100% of eligible project costs.
• The interest rate is 7.4% a year. During the project period, interest of 3.7% is payable on amounts drawn and 3.7% is deferred to the repayment period.
• The loan is secured by a debenture over the company's assets. Innovate UK expects to rank behind a senior secured commercial lender but ahead of equity investors, including those holding secured convertible loans.
• Financial covenants apply throughout, including a liquidity ratio and, in the repayment period, a debt service coverage ratio.
• Applications are paused from October 2026 until January 2027.

The security and ranking terms matter for a venture-backed company. A loan that ranks ahead of your investors will need their consent under most protective provisions, and it will be part of any acquirer's or new investor's diligence.

Knowledge Transfer Partnerships

A Knowledge Transfer Partnership (KTP) links a business with a "knowledge base" (a UK university, research organization or Catapult) and a qualified graduate who works on an innovation project inside the business. Innovate UK funds part of the project and the business contributes the rest; the current funding split is set in each round's brief. UKRI says UK-registered businesses and not-for-profit organizations can take part, and the current round is open to applications from UK-registered academic institutions, research and technology organizations and Catapults working with a business.

Round 4 of 2026–27 opened on 19 October 2026 and closes on 27 January 2027, with a share of up to £12.5 million available. Innovate UK Business Connect notes that changes to future rounds, funding limits and application requirements were set out in a briefing in October 2026, so read the current competition brief rather than older guides. A KTP suits a startup that needs specialist research capacity it cannot yet hire.

Innovate UK Business Growth

Innovate UK Business Growth, the successor to Innovate UK EDGE, offers one-to-one support from innovation and growth specialists across the UK on topics such as innovation strategy, IP, finance and investment readiness, and international expansion, plus a Scaleup Programme for the highest-potential companies. As of 26 October 2026, its page says new requests are paused during the current planning cycle, while existing and committed clients, including those receiving support through Innovate UK grant competitions, continue.

How to approach Innovate UK funding

• Search the IFS and the UKRI Funding Finder for open competitions that fit your project; do not write a proposal first and look for a home later.
• Read the competition brief in full: scope, eligibility, project size, eligible costs and the grant rate for your company size.
• Check that your business can fund its share of costs and carry the cash-flow gap until claims are paid.
• Track every public subsidy you receive. Subsidy limits and the investor tax reliefs under SEIS and EIS both count certain past state support.
• If you have equity investors, check their consent rights before taking an Innovation loan.
• For EU funding, UK companies can apply for the grant-only option of the EIC Accelerator.

Sources

1. Innovate UK, UK Research and Innovation. CC BY-NC-SA 4.0 (UKRI terms of use); cited for facts, not reproduced.
2. Velocity: long-term support for innovative businesses, UK Research and Innovation. CC BY-NC-SA 4.0 (UKRI terms of use); cited for facts, not reproduced.
3. Smart grants funding guidance, UK Research and Innovation. CC BY-NC-SA 4.0 (UKRI terms of use); cited for facts, not reproduced.
4. Smart Grants impact evaluation final report, UK Research and Innovation. CC BY-NC-SA 4.0 (UKRI terms of use); cited for facts, not reproduced.
5. Innovate UK general guidance and funding rules, UK Research and Innovation. CC BY-NC-SA 4.0 (UKRI terms of use); cited for facts, not reproduced.
6. Innovation competitions, Innovate UK, Innovation Funding Service. Cited for facts; not reproduced.
7. Innovation Loans, Innovate UK Business Connect. Cited for facts; not reproduced.
8. Knowledge Transfer Partnerships, Innovate UK Business Connect. Cited for facts; not reproduced.
9. Innovate UK Business Growth, Innovate UK Business Connect. Cited for facts; not reproduced.