Explore the ScaleUp Annual Review 2020

Select a section to expand and explore this year's review..

Innovating for Recovery: Innovate UK and its Scaleup Programme

Innovative businesses with strong potential to grow and scale make an outsized contribution to a thriving economy and society at the best of times. In the light of the Covid-19 pandemic, their contribution to our recovery will be indispensable. 

As the UK’s innovation agency, we have long invested in high-potential entrepreneurs and businesses across the UK that have the ambition and potential to contribute to economic growth and society through innovation. 

Our wrap-around support is key to how we seek to work with scaling leaders to provide a rounded set of solutions to their needs. This includes working in collaboration with partners in the innovation ecosystem; funding; infrastructure; connectivity and advisory support; along with tailored programmes to suit the  growth cycle of the business. 

One of the key elements of our investment is the Innovate UK Scaleup Programme. It  encompasses bespoke advisory ‘board’ support that seeks to move innovative firms along their scaleup journey rapidly. It addresses some of their key challenge areas such as – access to funding and finance, internationalisation, infrastructure and internal operations, intellectual property (IP) and talent acquisition and retention.

The programme is specifically for R&D-intensive and IP-rich scaleups, who are ambitious for growth. To be successful, it has required an intense focus, resources and, crucially, a deep understanding of the scaleups’ proposition, markets and vision. These are companies with the potential to transform technologies, industries and the marketplace – and to stride the world stage – so they need precisely tailored support.

These companies are also key to our recovery. As such, we are rising to the challenge posed by Covid-19; a challenge that affects our scaleups in a multitude of ways. As part of the Government’s overall commitment of £550m of new Covid-related funding for Innovate UK, £39m has been committed over two years for an enhanced package of growth and scaleup support for Innovate UK-funded businesses.

The Scaleup Programme is an integral and critical part of our response to Covid.

Lessons from the pilot programme

The key objective of the Innovate UK Scaleup Programme is to support highly innovative, ambitious, high-growth oriented companies who are already on their scaling journey, whose innovations and/or business models can disrupt an existing market, and who are primed to implement or are already implementing their international markets strategy. 

The pilot programme, which worked with 29 companies, concluded in December 2018 and was evaluated last year, yielded many positive results: 

  • The scaleups collectively raised around £26.5m (grant/equity) during the programme and post pilot. 
  • Nine companies secured new international collaboration agreements or established their presence in international markets. 
  • Nine IP audits and valuations were conducted with a commercial value identified of £4.5m. 
  • 165 new jobs were created during the pilot and a further 141 were projected in 2019. That total of 306 jobs equated to an average growth of over 40% in job numbers across the pilot cohort.

The job growth alone suggested a potential impact on the UK economy of approximately £8.4m in aggregate and a benefit of £27 for every £1 invested in the Scaleup Pilot Programme. 

A tailored delivery model

Taking lessons from the pilot programme,  through 2020 we have delivered an enhanced Scaleup Programme based on a unique ‘Advisory Board’ structure.  

This is led by a Scaleup Delivery Board comprising 21 high-calibre Scaleup Directors, who have direct experience of scaling a business. Between them, they provide a wide and deep matrix of experience of particular value to rapidly growing, R&D-led companies. The board considers how it can best apply its resources to help these companies exploit scaling opportunities.

In addition, a Scaleup Oversight Board aids the development of the programme, with members from the London Stock Exchange, British Business Bank, BGF and successful scaleup entrepreneurs.

Scaleups qualify for the programme after a detailed and structured selection process and submitting an expression of interest. This is discussed by the scaleup board, scoring the companies with a focus on four key areas – innovation, sustainability, scalability, and market position and potential. If the board considers the programme will benefit the company, then before final selection, two of the Scaleup Directors make a site visit and submit their report for final consideration by the Scaleup Delivery Board. 

The selection process is rigorous; 36 companies out of the 91 expressions of interest were admitted onto the first cohort in 2020. Those which are not admitted are directed to other sources of support identified as being more appropriate for their current needs.

After site visits, the Scaleup Directors can identify how to best apply resources to help the scaleup  businesses address their biggest challenges and opportunities. While the programme is not time constrained specifically, its intensive phase should come to a natural conclusion when the key challenges or barriers to the next phase of scale have been addressed. Engagement continues then on a periodic basis as the business evolves; it is fundamental to keep the scaleups’ needs, capacities and business priorities at forefront of the focus and activity.

So each scaleup benefits from:

  • One to one tailored mentoring support 
  • A focus on their particular key scaleup challenges 
  • A dedicated account manager 
  • Hands-on support from a team of highly skilled and experienced growth practitioners that comprise the Scaleup Board,  which works across the companies  for example a scaleup on the programme can be based in the South-East but receive specialist support and guidance  from members of the Scaleup Delivery Board in Wales and the North of England, as well as accessing local Innovate UK resources. Each company on the Scaleup Programme thus benefits from the sum of all the parts, drawing on expertise for specific scaleup challenges.
  • Connectivity to wider Government and private sector resources 

While Innovate UK delivers much of its support on a sectoral basis and other organisations’ scaleup programmes may be delivered on a regional basis, our Scaleup Programme is national and cross-sectoral focus and specifically designed to help scaleups go global, connecting into new markets and corporate partners. 

The support has been described by participants as “invaluable,’’ and “hands-on world class guidance’’ and offering “much needed support to develop opportunities and cut through connections to key larger corporate customers.” 

The 2020 cohort

The Covid pandemic means that elements of the programme delivery have been adapted from face-to-face to online. More importantly, the programme has been able to support those scaleups that have needed either to shift their market focus or pivot their business strategy, and to help them navigate the changing environment.

Reflecting the 2020 ScaleUp Survey results, the majority of the companies have identified access to markets (commercial exploitation and internationalisation), skills & talent and access to funding as key scaling challenges for Scaleup Directors to address. Companies have also received extensive support around their infrastructure needs and several have improved their manufacturing processes and supply chains. 

Progress of these companies thus far in 2020 have been encouraging. Several are already significantly increasing their headcount and others are projecting further scaleup levels of employee and turnover growth as we move into 2021. Major contracts have been signed. 

Companies on the programme include Loop Technologies, which features as a Scaleup Story in this year’s Annual Review; the programme has provided support in building a robust financial plan, plus the development of an investment proposition and introductions into the investment community. Other companies include Photocentric, where the programme is helping with strategy, organisational development and process synergy; VR Simulations, with whom the programme has assisted in developing a robust financial plan and investment collateral – as a result it has secured significant investment and introductions which have secured its long term growth plans; Brandon Medical, which has been supported in NPD development and go to market strategies, underpinned by financial modelling and funding strategy; and Bond Digital Health, who have been helped to understand the compliance landscape for its technology, to structure the business at the point of scaleup, source funding and structure a funding offering.

Future Innovate UK developments for scaleups

Scaling, innovative businesses play a central part in the UK’s recovery. From April 2020 to March 2022 Innovate UK is looking to engage with up to 200 ambitious scaleups with the potential to scale exponentially – 50% to 100% year on year growth without the same proportional increase in costs – in a relatively short time frame (3-5 years). 

Additional cohorts in 2020 are expected to bring the number on the programme this year to approximately 100 but importantly, the emphasis is on quality, not quantity, and the focus is on engaging with companies at the most appropriate juncture of their scaling journey, supporting them where the programme can make most difference.

And the participants on the Scaleup Programme continue to access ongoing support. Beyond identified programme challenges, further support has already been provided to 29 of the first companies participating in the inaugural first cohort and in 2021 we will establish an ongoing innovation peer network , working with the ScaleUp Institute, to continue engagement.