Innovate UK commits to £2m in funding for SETsquared to stimulate business growth in the South West

SETsquared has been guaranteed an additional £2m funding from Innovate UK, a non-departmental public body providing support to companies by way of finances and business support.

The funds will be used to run a second phase of the Regional Angel Investment Accelerator (RAIA) scheme, a process which will be supported by the UK Business Angels Association (UKBAA) in partnership with SETsquared, through a programme of investor capacity building and education.

The RAIA scheme has 3 established goals. The first is to help innovative business to simultaneously raise non-dilutable grant funding alongside Angel investment. The second is to bring in new Angel investors and increase diversity in the early-stage investment community. The third is to encourage Angels to endorse disruptive technology businesses that aim to affect normal market or industry operations.

The partnership between the UKBAA and SETsquared initially secured £1m during the pilot programme for the RAIA scheme in 2019. This pilot progr amme assisted 9 businesses across the South, South West and South Wales – SpaceForge, Okko Health, Anaphite, Ceryx Medical, Goal Shaper, NuNano, Kaydiar, Think Cyber and Kelpi, all of which are members of SETsquared’s Scale-Up Programme – to obtain £820k of Innovate UK grant funding which leveraged over £2m Angel equity investment.

Bath-based Kelpi, founded last year, produce compostable bioplastic made from seaweed as a replacement for single-use plastics. They were awarded a grant alongside investment from Bristol Private Equity Club’s new Seed division. Neil Morris, Chief Executive Officer at Kelpi, describes how important the investment is to them: “This landmark investment will enable Kelpi to advance its work as one of just a handful of companies worldwide using seaweed to create entirely new bioplastic packaging solutions. We set out to play a part in eliminating plastic pollution and enabling net zero. This funding will allow us to accelerate progress towards achieving that goal.”

Bruce Colley, Access to Finance Manager for Innovate UK, explains their decision to grant the funding: “The RAIA scheme enables us to distribute funds directly to where they are needed within UK tech clusters whilst also generating additional private investment from Angel investment communities. The figures speak for themselves - SETsquared and UKBAA - successfully proved through the pilot that not only did they have a pipeline of highly innovative companies that benefitted from the scheme but could also attract new Angel investment communities to the opportunity of investing in early-stage, deep-tech start-ups. We were, therefore, more than happy to provide additional funding to the scheme so that further early-stage business can benefit from this transformative funding.”

Rosie Bennett, Investment Manager at SETsquared, says: “I’m thrilled to be able to announce that we now have 15 Angel syndicates in our RAIA consortium including investors with both a regional interest such as Bristol Private Equity Club, and QantX, sector and mission-led investors like Zero Carbon Capital, Britbots and Science Angel Syndicate, and syndicates with a specific mandate to invest in diverse founders like Cornerstone Ventures. It’s great that – as a consortium - we can continue to build on the momentum and success of this pivotal programme with further funding from Innovate UK.”