“It was a mistake”: Innovate UK U-turns on female founder grants

Innovate UK, the national innovation agency, has U-turned on its decision to award just half of the 50 grants in its ‘Women In Innovation’ funding competition for women entrepreneurs.

The organisation received 1,452 applications and had “up to £4m” in funding available to give to the winning entrants. But despite clear appetite from female founders, it emerged over the weekend that only 25 of the grants had been awarded, leaving 25 unaccounted for.

On Monday afternoon, the non-departmental public body released a statement confirming that all remaining £75,000 grants will now be awarded. The change comes mere hours after hundreds of founders signed an open letter calling for “urgent reform” of Innovate UK.

Innovate UK: “we prioritised wrongly”

In a 376-word statement on its LinkedIn page, Innovate UK confirmed yesterday it would 

be funding a total of 50 awards, representing the original £4m committed. It also apologised for “the concern and frustration that we have caused.”

Source: linkedin.com/company/innovateuk

While reasoning for the decision has not been revealed, the statement hints that it may have been due to financial constraints.

“As public funders, we must manage our budgets carefully”, reads the post. “The decision to only award this number was a mistake and we prioritised wrongly.”

According to the organisation, it will now set about contacting the next highest-scoring 25 successful applicants to confirm funding, starting immediately.

It will have no problem finding the additional applicants to support. Innovate UK also stated that this year’s competition had received its highest response to date, revealing (ironically) that plenty of women innovators are fundraising this year.

Swift action following campaign

Innovate UK had received criticism for a ‘holding statement’ it shared on its LinkedIn page on Monday morning. In the post, it promised to update unsuccessful applicants “this week”. This prompted one founder to criticise the Innovate UK response as a “total comms sh*tshow”.

On Saturday, femtech founder Emma Jarvis wrote on LinkedIn calling on Innovate UK to award the full 50 awards. The post attracted over 800 likes and 111 reposts from fellow LinkedIn users, and gained traction among both men and women entrepreneurs.

On Monday afternoon, an open letter appeared on LinkedIn, calling for “urgent reform” to Innovate UK. The campaign is spearheaded by Becky Lodge, who is founder of Little Kanga and StartUp Disruptors, alongside investor experts Zandra Moore and Tara Attfield-Tomes.

Named Let’s Fund More Women, the campaign resulted in hundreds of posts from investors, founders, and supporters, successfully putting pressure on Innovate UK to act swiftly.

Source: linkedin.com/company/innovateuk

After the Innovate UK announcement, many commented to thank those in the organisation for listening to their concerns. “What fantastic news, and a thank you to those in the community who contacted Innovate UK and fed our concerns back”, wrote one founder.

Innovate UK “needs to reflect”

While a positive outcome has been reached, the fact is that Innovate UK came close to underdelivering nearly £2m in funding for female founders. Questions are already being raised about how and why it chose to cut funding for a women-led competition.

Innovate UK funding for 2020 to 2021 reportedly totalled £885m. If it spends the same amount this year, the Women in Innovation awards will represent just 0.4% of its budget.

“Innovate UK needs to reflect on who participated in the board meeting where the decision was made on how to “carefully” manage the budget,” one female founder wrote in response to the Innovate UK statement. “Who was it that made those prioritisation choices?”

Accessing early-stage funding as a female founder is already a challenge. Startups data has found that the gender funding gap in 2024 means that female founders will raise, on average, six times less in funding than male entrepreneurs.

Earlier this year, the government attempted to roll out changes to angel investors that would have made it even harder for female-led businesses to raise money. Thankfully, in a move that Innovate UK has now echoed, it U-turned at the final hour.

In this context, Innovate UK has been vital for levelling the playing field for female-led businesses. As the organisation shared in its post, one in three successful applications to Innovate UK competitions are now led by women, compared to one in seven in 2016.