Innovate UK
UK Government innovation agency replacing open-competition grants with a portfolio management model from April 2026.
Innovate UK replaced open grant competitions with a DARPA-styled portfolio model in April 2026, scouting deep-tech firms directly as UK grant awards fell to a ten-year low across the same cycle.
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Innovate UK is part of UK Research and Innovation and has been Britain's principal government-backed business-innovation funder since 2004, supporting more than 200,000 businesses over that period through grants, loans and innovation-support programmes.
Since April 2026 its flagship approach has been the Velocity portfolio model, run by sector-specific Growth Sector Teams that actively scout companies rather than waiting for open applications. Scheduled sector competitions continue alongside it: rail, agritech, offshore wind, cyber and counter-drone rounds have all opened and closed through 2026.
Critics argue the shift concentrates awards among well-connected firms near the 'Golden Triangle' of Oxford, Cambridge and London, at the expense of regional and early-stage applicants; European peer agencies, by contrast, still run predominantly open, competitive grant calls.
Grant funding concentrates in fewer hands
Innovate UK published a new prospectus in April 2026 replacing open grant competitions with a portfolio-management model: dedicated Growth Sector Teams now scout deep-tech companies across six priority sectors rather than waiting for applications, styled by the agency on DARPA.
UK grant awards fell to a ten-year low across the same cycle. Award sizes moved the other way: Innovate UK's own typical grant climbed nearly 11% to £423,000, so fewer companies now receive larger, relationship-managed cheques rather than a wider spread of smaller open-competition grants, a deliberate concentration rather than a market collapse, that leaves earliest-stage proof-of-concept work harder to fund than at any point in a decade.
Innovate UK opens defence-tech grants
Innovate UK opened a £3.5m Cyber Scale in Critical Sectors competition on 29 April 2026, an unusual instrument requiring bidders to demonstrate their technology inside live critical-infrastructure sites rather than a laboratory, with deployment rights for winners.
Days later, on 5 May, it opened two further defence-adjacent rounds: Counter UAS Technologies, with up to £5m in grants of £300,000 to £1.25m and mandatory SME collaboration, and Dual-Use Aviation Systems and Autonomy at up to £10m, both closing 3 June. The £15m sits alongside separate MOD funding mechanisms, positioning Innovate UK as a route into defence procurement for firms too small for prime contracts.