London, UK, 21st May 2019 / The £27m UK Innovation & Science Seed Fund (UKI2S) and Innovate UK (IUK) have launched a joint initiative, the UKI2S Innovate Accelerator. With £10m of IUK funding to be used alongside direct equity investment by UKI2S, the new scheme is designed to boost some of the UK’s most exciting young companies.
The UKI2S Innovate Accelerator combines the technology assessment and grant funding capabilities of Innovate UK with equity funding from UKI2S, one of the UK’s leading seed-stage investors. It has been created to help companies accelerate their innovation, product development and intellectual property value faster than might be possible with equity investment alone. The Accelerator is intended to run for an initial two years and aims to back around 25 companies across a wide range of technologies and sectors.
Opportunities range from an initial feasibility study through to the development of advanced engineering prototypes or critical pre-clinical studies for therapeutics. Grant sizes are likely to range from below £100,000 up to £1m for exceptional cases, with matching equity funding from syndicates led by UKI2S. Companies selected by UKI2S from its existing portfolio and its pipeline of potential new investments will be invited to apply for grants from the Accelerator.
This model builds on UKI2S participation in Innovate UK’s successful Investment Accelerator pilot in 2017. UKI2S accounted for a significant proportion of the companies funded under the 2017 scheme, and the fund’s track record in creating companies and leveraging over £400m private investment made it an obvious choice to continue IUK’s programme of partnering with venture funds.
The initial cohort of companies, spanning healthcare, energy and smart city technologies, are now embarking on research and expansion projects funded through the new Accelerator. One recipient, Tokamak Energy, is one of the leading private companies racing to deliver energy from nuclear fusion; it recently announced that it had met its initial target of a plasma temperature of 15 million degrees centigrade, hotter than the centre of the sun. The Accelerator funding will enable Tokamak to accelerate the development of improved ultra high field magnets to contain the plasma and to explore non-energy applications such as manufacturing radio isotopes for medical use.
Dr Andrew Muir of UKI2S said: “Over the past decade we have had an increasingly close working relationship with Innovate UK and we were big supporters of the pilot they ran in 2017, which enabled UKI2S to move faster and with more confidence to help several companies raise funding. The initial response to this partnership from our portfolio companies has been exactly as we hoped and we have seen several companies expand or bring forward their development programmes as a result.”
Tim Sawyer, Chief Investment Officerof Innovate UK, said: “Innovate UK is committed to diversifying its funding offering so companies can access a greater choice of finance products most appropriate to their stage of development. With this Accelerator scheme, we can create a multiplier effect to crowd-forward private sector investment. By working with the investment community right from the start and awarding our funding simultaneously, we can help companies with brilliant ideas to scale and grow with confidence.”
Innovate UK has been working increasingly closely with the UK’s early stage venture funds to leverage equity funding alongside the range of grant support offered by IUK. By the end of 2018/19, Innovate UK committed £16m across the Investment Accelerator portfolio to mobilise £22.5m in equity investments into innovative UK companies.
Notes to editors
About the UK Innovation & Science Seed Fund (UKI2S)
UKI2S is a national seed investment fund that helps the UK to build innovative businesses, leverage private investment and grow jobs. UKI2S achieves this by nurturing new businesses arising from the great science undertaken in the UK; providing the patient, long-term committed capital and strategic advice these companies need. Over the past decade and more, UKI2S has built a substantial track record with 55 portfolio companies created – with only £14m of capital from UKI2S – that between them have attracted over £400m of later stage investment and now have a combined market value of over £700m. UKI2S works closely with its partners – led by STFC, BBSRC and NERC, which are all part of UK Research & Innovation (UKRI) and Dstl — and is aligned with the Catapults and Innovate UK to create the best environment for innovation to flourish and in turn, boost the UK’s competitiveness and productivity by commercialising key technological advances in industrial biotech, ag tech, healthcare, medicine, clean energy, materials, artificial intelligence, software and space. UKI2S is independently managed by specialist venture capital firm Midven www.midven.co.uk
For more information, please visit www.ukinnovationscienceseedfund.co.uk.
About Innovate UK
Innovate UK is part of UK Research and Innovation, a non-departmental public body funded by a grant-in-aid from the UK government. For more information visit UK Research and Innovation’s website. We drive productivity and economic growth by supporting businesses to develop and realise the potential of new ideas, including those from the UK’s world-class research base.