Innovate UK Smart Grants Update
Innovate UK has temporarily paused its Smart Grant programme to reassess how innovation funding is allocated. The surge in applications has led to a sharp decline in success rates, with only 10% of applicants securing grants in recent rounds. The last round saw over 2,500 applications, yet fewer than 50 projects received funding, highlighting the need for a more targeted approach.
While this may seem like a setback, Innovate UK has confirmed that this is not a budget cut but rather an effort to refine the funding model to better support high-growth, impactful businesses. The revised Smart Grant scheme is expected to launch within the next 6-8 weeks, following consultations with businesses and stakeholders. Here’s what you need to know and how to prepare.
Innovate UK Smart Grants Alternatives – £2 Million Available now
EIC Accelerator Grants from Horizon Europe are now available to British SME’s. Surprisingly, most British SME’s are simply unaware that we can apply for these grants and are missing out. In many ways, these grants are better than the Innovate UK Smart Grants and can be easier to win. Find out more about the EIC Accelerator and how to apply here
Why Has Innovate UK Paused the Smart Grants?
The Smart Grant programme has seen a significant rise in applications, particularly from AI-driven grant consultancies and AI-generated applications. This influx has contributed to an increase in lower-quality, templated responses that fail to effectively demonstrate genuine innovation or commercial viability. As a result, the programme has become highly competitive with an influx of applications, making it more difficult for high-growth, impactful projects to stand out.
This has led to:
- Lower success rates – The sheer volume of applications has made it difficult for truly innovative projects to stand out.
- Concerns over funding allocation – Innovate UK wants to ensure funding is awarded to businesses with genuine commercial potential and a clear route to market.
- A need for better targeting – The review aims to refine how grants are distributed to support the UK’s economic growth and regional innovation.
Innovate UK’s goal is to make the Smart Grant more effective, more accessible, and better aligned with the needs of high-growth businesses.
What Changes Are Expected?
Recent advancements in AI have made it easier for applicants to submit templated, AI-generated answers that lack depth and genuine insight. Large consultancy firms have also flooded the programme with mass-produced applications, contributing to the decline in success rates and making it harder for innovative businesses to secure funding.
Future rounds will likely introduce:
- A More Selective Approach – Grants will prioritise businesses with a clear market opportunity, a scalable innovation, and a strong commercialisation plan.
- A Greater Focus on Impact – Emphasis will be placed on projects that can deliver measurable economic and societal benefits.
- A New Application Format – The application process may shift towards more detailed and specific questions to eliminate generic responses.
- A Pilot Programme – Launching in Spring 2025, this initiative will explore new ways to support innovation, sustainability, and scaling challenges.
How to Prepare for the Relaunch in 2025
Although the Smart Grant is temporarily unavailable, now is the time to refine your application strategy to maximise your chances of success when it returns.
Review past applications, particularly if a previous submission was rejected, and assess whether it effectively distinguishes your innovation from existing solutions. AI-generated responses often strip away the unique aspects of a project, leading to generic, template-style applications that fail to score well. The new system will assess applications more critically, ensuring that businesses clearly articulate their innovation, commercial viability, and market impact.
Businesses should:
- Reassess their application content to ensure it provides a detailed, specific, and compelling case for funding.
- Ensure their application reflects their business identity rather than a templated answer that could apply to multiple projects.
- Use external grant consultants strategically – AI can assist with research and structuring, but high-quality applications require human insight and tailored responses.
A strong application must clearly articulate the problem being solved, the innovative solution, its impact, and how the business will scale. AI-driven, mass-produced applications will no longer be competitive in this revised programme and the format may change from round to round.
Broadening Your Funding Strategy
Businesses should diversify their funding approach rather than relying solely on the Smart Grant. Consider:
- Innovate UK Themed Grant Funds – These targeted grants align with specific industry needs and innovation priorities. Here is a link to the Current Innovate UK Grants available to SME’s
- Innovate UK Innovation Loans – A funding option for businesses looking to scale their innovative development in readiness for commercial activities. Find out more about Innovate UK Innovation Loans. More information about the Innovation Loan can be found here.
- Horizon Europe Grants – A strong alternative for R&D-heavy projects funded from Horizon Europe, the UK are now allowed to apply for grants in this fund again. UK companies have historically been very successful in this fund. But since Brexit and our initial exclusion, applications from UK SME’s are significantly lower and are actively encouraged. You can apply as a single SME and there are grants such as the EIC Accelerator that are very similar to the Innovate UK Smart Grant. More information about Horizon Europe Grants and the the EIC accelerator Grant can be found here.
- Angel Investment & VC Funding – Private investment opportunities to support business growth and product development. Angel Investors look for early stage innovative products and services to invest in. The Startup Factory runs regular Angel Investment Competitions for investment up to £50,000. Organisations such as the Angel Investment Network introduce Innovative SME’s to Angel Investors all over the world. The fact that you are applying for a grant innovation loan is a big positive for potential angel investors.
A multi-faceted funding strategy will ensure that your innovation continues progressing while preparing for the Smart Grant relaunch.
While the Innovate UK Smart Grants pause may seem disruptive, it presents an opportunity to improve the programme’s effectiveness and ensure funding goes to the most innovative, high-impact businesses. Companies must use this time to refine their applications, develop stronger commercial strategies, and explore additional funding sources.
For SMEs with projects close to market, now is the time to widen your funding search. The Smart Grant is expected to return in 6-8 weeks, and businesses that prepare now will be in the best position to submit a high-quality, well-structured application that stands out.
Need help preparing for future funding rounds? Contact Novigo Grant Funding today to develop a winning application strategy.
Call Novigo Grant Funding on 07868 748856 or email ggibbons@novigogrants.co.uk for more information on current funding options.