Innovate UK

Innovate UK published a new operating prospectus in April 2026 that replaced open-competition grant programmes with a portfolio management model more similar to DARPA or a venture fund than a traditional grant body. The centrepiece is the Velocity programme — a continuous, relationship-based account management service for high-potential businesses, replacing fixed application windows with ongoing engagement. Growth Sector Teams will actively scout deep-tech companies across six priority sectors rather than waiting for applications. A High Potential Business Framework evaluates companies on team capability, technical breakthrough, talent pipeline, and market readiness.

Innovate UK is part of UKRI (UK Research and Innovation) and has been the UK's principal government-backed business innovation funder since 2004. Over its history it has supported more than 200,000 businesses and deployed billions in grant and loan funding across sectors including aerospace, life sciences, clean energy, and digital technology. However, UK grant award counts fell to their lowest since 2016 in 2026 data, even as average grant sizes rose — indicating a structural shift toward fewer, larger awards. The Velocity model formalises this concentration.

The new model reflects a broader government view that the UK has been too conservative in identifying and backing national champions early. By moving to active portfolio management — stepping in where private capital won't, stepping back when it does — Innovate UK is positioning itself as a catalytic public investor rather than a distributor of competitive grants. Critics argue that the shift squeezes proof-of-concept funding for early-stage spinouts outside the Golden Triangle, and that concentration of awards in well-connected companies risks entrenching incumbents.

In May 2026, Innovate UK opened £93m in combined competitions across two transport and agritech strands: Contracts for Innovation FOAK26 (£4.3m, closing 24 June 2026) targeting transport innovation deployments, and the Defra Farming Innovation Investor Partnership 2026 (£5m, closing 17 June 2026), jointly run with Defra and requiring matched private investment. These competitions sit alongside the new portfolio model — they are sector-specific programmes using the classic grant/procurement format for cases where open competition remains appropriate, while the Velocity model handles relationship-based high-potential company engagement in parallel.

On 30 June, Innovate UK topped up Exeter spinout Neuronostics' £3m BioEP epilepsy-biomarker round with a £400k Investor Partnerships grant, a matched co-investment instrument distinct from the open competitions above: it de-risks private capital already committed rather than replacing it, filling in behind the sub-£5m spinout tier that the British Business Bank's national tracker shows contracting sharply in 2025.