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SMEs transforming food production: Series A investor partnership

Overview:

UK-registered SMEs that are transforming food production towards net zero can apply for a share of up to £5million in grant support. This must align with a series A investment. The grant funding is from the Industrial Strategy Challenge Fund.

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.

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

Open Date:

02/11/2020

Close Date:

13/02/2021

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

Innovate UK 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

Innovate UK 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, Innovate UK 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. You will be asked for evidence of this.

Your project must:

  • Have total eligible costs between £1million and £3million
  • Start by 1 October 2021
  • End by 31 March 2023
  • Last 18 months

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.

Innovate UK 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.

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 their pool. Find out more about the bootcamp activities.

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

Grant funding

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

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.

Innovate UK are not funding projects involving:

  • Equine
  • Amenity horticulture
  • Wild-caught fisheries
  • Non-food crops

Cresco Innovation works with companies to develop and implement innovation strategies. We help client companies identify opportunities to develop new products and services, and then create a package of support to ensure that the idea is turned into a commercial reality.

Our services include securing grants (as a team we have raised around £40million over three years), business planning, IP advice, access to finance and funders, project management and IP commercialisation support.

We regularly act as the interface with the funding bodies and help clients ensure that their projects are properly managed to ensure the best outcome for all.

Call to find out more

If you’d like to know more about this competition, please give us a call on 01509 261182 and one of our team will be delighted to help you access this funding opportunity for your business.