Attracting risk capital is essential to scaling innovative companies in the British innovation ecosystem
Innovate UK is pushing to strengthen links between investors and the UK’s innovation ecosystem to scale the next generation of high-growth companies, Sara Palmer, head of investment at its investor engagement arm UK Business Connect, told delegates at Longview Network’s Institutional Venture & Growth Forum yesterday.
“Innovate UK’s purpose is to work at the frontier of business-led innovation, supporting companies that are solving societal challenges, but with commercial opportunity. Our role is about taking on the innovation risk, to de-risk the commercial growth that follows,” Palmer said.
She outlined the five key pillars of a model innovation ecosystem: founders, universities, corporates, government and risk capital. Unlocking this capital across the investment chain is essential, Palmer stressed.
“Unlocking private capital at all ends of the scale, from high-net-worth individuals and angel investors, via institutional investment, is absolutely key to making sure we grow the future unicorns in the UK, and importantly, to make sure that they stay here because it’s the best commercial decision for them.”
Palmer highlighted Innovate UK’s Investment Partnerships Programme, launched in 2017, which connects grant funding with equity investors. “Where we’ve invested £156 million in 390 companies since 2017, that has gone to accelerate the fundraising of £1.57 billion into that portfolio. It’s been hugely successful for the companies.”
The programme has also helped increase diversity in innovation. “Our Investment Partnerships portfolio, following a very specific intervention, rather than just an intent, has 44% investment going on to female-led companies,” she noted.
Palmer called on institutional investors to engage with Innovate UK’s networks and showcases, from deep tech to regional spotlights. “We need connected capital journeys for building the next UK unicorns. We know that the sooner you see the businesses we support, the more likely you are to come in when the time comes.”