+44 (0)1509 261182

Transforming Foundation industries: Investor partner selection


Investors can apply to align their investments with up to £7million grant funding from Innovate UK to make foundation industries globally competitive. This funding is from the ISCF.

Innovate UK, as part of UK Research and Innovation, is inviting investors to partner with them for the Foundation Industries Investor Partnership programme (IPP). Together they will align Innovate UK’s grant funding of relevant late stage R&D projects alongside your investment in UK micro, small and medium-sized enterprises (SMEs) concerned with one or more of the themes of reducing resource and energy consumption.

Innovate UK are seeking investor partners that want to invest in high growth potential SMEs. The SMEs:

  • Must aspire to finding solutions that make the foundation industries more competitive through reducing resource and energy use
  • Will be selected in a later competition

Investor partners must provide wider business skills and experience as well as financial investment.

The Transforming Foundation Industries Investor Partnership programme consists of two competitions:

  1. Transforming Foundation Industries: Investor partner selection, which is this competition.
  2. Transforming Foundation industries IPP: SMEs competition, which opens in spring 2021. This will be for SMEs to apply for project grant support with a clear alignment for private investment.

This competition is not offering any funding.

Open Date:


Close Date:


Innovate UK have allocated up to £7million to provide grant funding for SME projects aligned with private investment from investor partners.

The objective of this programme is to support SMEs to carry out projects that reduce energy and resource use in the foundation industries. SMEs can be from the sector itself, or from the sector supply chain.

No aid is made available to the investor from Innovate UK.

During the SME competition, businesses will identify their total funding requirement which will include Innovate UK grant funding aligned with equity investment.

If your organisation is selected to be an investor partner you will be expected to identify potential UK micro, small and medium sized enterprises (SMEs). These can be:

  • New investments for your organisation
  • Opportunities currently under consideration by you
  • SMEs already in your portfolio who are looking for further investment and grant funding for a specific project element

These SMEs will be required to submit applications for funding to the Transforming Foundation Industries IPP: SME competition.

The SMEs seeking support will be required to carry out projects that meet the objectives of the ISCF Transforming Foundation Industry Challenge.

These are:

  • Energy costs and optimisation such as heat or energy recovery and reuse
  • Process measurement, optimisation and digitisation, such as sensor technology or digital tools
  • Waste recycling, utilisation and symbiosis, such as reuse of waste or industrial symbiosis
  • New product and service development, such as new materials, new materials-based products and services, or new business models

If the SMEs are successful, you will be required to make an investment into the SME business that is the same as or exceeds the value of the Innovate UK grant. SMEs seeking support will be required to carry out projects that reduce energy use or minimise resource use in the foundation industries.

SME selection process

Innovate UK plan to open the first SME competition in Spring 2021. Innovate UK will assess each invited project application using our independent pool of expert assessors and rank the assessed applications as fundable and non-fundable.

Lead investor partners will be expected to undertake their normal discussions and due diligence with SMEs of interest. Innovate UK will only offer aligned grant funding to SMEs that reach heads of terms with their investor partner.

Innovate UK expect that funded SMEs will be ready to start their projects as soon as investment has been confirmed in writing and after they have completed project finance checks.

SME project requirements

SMEs’ projects must start no later than the date published in the SME competition, and in finish no later than March 2024. Projects can have a duration of up to two years.

Total eligible project costs submitted by the SME must be between £50,000 and £2million.

For feasibility studies and industrial research projects, SMEs could get grant funding for eligible project costs of:

  • Up to 70% for a micro or small organisation
  • Up to 60% for a medium-sized organisation

For experimental development projects which are nearer to market, SMEs could get grant funding for eligible project costs of:

  • Up to 45% for a micro or small organisation
  • Up to 35% for a medium-sized organisation

If Innovate UK select you as an investor partner, you will be required to lead the aligned investment into your selected SMEs, if the SME proposal is allocated funding in the SME competition. Your investment must be at least equal to the amount of the Innovate UK grant. The investment should provide suitable capital to the SME, alongside the grant, to allow them to complete their project and enable the SME to grow and scale.

The investment can be in the form of either direct equity investment or convertible loans. It can come from:

  • A single investor partner
  • A lead investor partner syndicating with other investors from within or outside of the pool

State aid

The grant is provided through state aid funding under article 25, ‘Aid for research and development projects’, of the General Block Exemption Regulation (GBER). It is the SMEs’ responsibility to ensure they are compliant with state aid rules and that they are eligible to receive state aid. They are advised to seek independent legal assurance to that effect.

Innovate UK seek investor partners to invest in high growth potential micro to medium enterprises that aspire to:

  • Develop internationally competitive products, services, or business models by reducing energy or resource consumption
  • Make the foundation industries more competitive through the use of cleaner energy or reduced consumption of materials and resources
  • Address the transforming foundation industries themes in the Industrial Strategy Challenge Fund

The ISCF definition of Foundation Industries includes cement, ceramics, chemicals, glass, metals, and paper.

The SMEs will be identified by the investor partners and selected in a later competition.

Your organisation must be an equity provider with the potential to act as lead investor in investments from £50,000 to £2million.

Innovate UK aim to appoint several investors, interested in making investments aligned with Innovate UK grants. Investments must be either direct equity or convertible loans.

You must also be able to offer other commercial acumen to SMEs, such as:

  • Leadership
  • Market access
  • Skills or resources

You do not have to make any funding commitment at this stage. Innovate UK will need your commitment to provide aligned investment where Innovate UK offers grant funding to successful applicants in the SME competition.

You must be able to demonstrate that your organisation is of good financial standing.

Innovate UK are looking for mix of UK established investors with an interest in foundation industries, including venture capital, angel networks, and corporate venture investors.

Your organisation must demonstrate it has the capability, capacity and investment appetite to fund individual SMEs that aim to achieve the ‘environmentally sustainable’ objectives of the ISCF Transforming Foundation Industry Challenge.

Innovate UK’s preferences

Innovate UK are particularly interested in investors who:

  • Are willing to act as sole investor or be the lead investor where additional co-investment is required
  • Are prepared to deploy their investment with a patient and long-term view
  • Can follow their investment and potentially provide more financing when required with an aspiration to fund or leverage total investment of up to three times the original grant funding by 2025
  • Can commit to helping the SMEs with international aspirations to grow and scale up
  • Have relevant sector or technology-specific expertise around making the UK internationally competitive, in manufacturing products vital for our economy, in an environmentally sustainable way

How investors are selected

The process for becoming an investor partner is selective. Applications will be assessed by external independent assessors. Applicants that pass the minimum quality threshold will be invited for interview.

By submitting an application to become an investor partner, you agree to be bound by the additional terms and conditions of the memorandum of understanding.

The document will not be countersigned by Innovate UK, so it is not binding, until you are confirmed as an investor partner.

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.