Illustration of a UK startup founder reviewing innovation grant application documents at a desk

Smart Grant Stage 2: What It Is and How Innovate UK’s Two-Stage Grant Process Works

ByAlex Morgan

Key takeaway: Smart Grant Stage 2 was the full, detailed application step in Innovate UK’s two-stage grant process. Applicants who cleared Stage 1 — a short expression of interest — were invited to submit a complete Stage 2 bid covering the technology, market evidence, finances, team, and risks. Important: Innovate UK has now closed Smart Grants to new applications, aligning funding to its new strategic direction.

If you searched for “smart grant stage 2,” you are most likely an innovator, founder, or researcher trying to understand how Innovate UK’s two-stage funding application worked — and whether the door is still open. This explainer covers the facts: what Stage 1 and Stage 2 were, what a Stage 2 application required, and the programme’s current status.

Smart Grant Stage 2, explained: what Smart Grants were

Smart Grants were Innovate UK’s flagship grants for game-changing R&D projects with strong commercial potential and economic impact for the UK. They funded a portfolio of projects — feasibility studies, industrial research, and experimental development — across technologies and markets, including industrial research projects and experimental development work, according to the University of Reading’s innovation funding guide.

Typical Smart Grant rounds awarded project funding requests between £100,000 and £2 million, covering up to 70% of eligible R&D costs for small businesses (lower rates for medium and large businesses, and lower rates for experimental development work closer to market). Projects typically ran from six months to two or three years, depending on the round. Applications were submitted through Innovate UK’s Innovation Funding Service (IFS), an online portal where competitions open, briefs are published, and bids are submitted and assessed.

Eligibility was straightforward in principle: the applicant had to be a UK-registered business working on a genuinely novel project, usually with at least one SME in the lead or consortium, and the project had to be carried out in the UK.

What “Stage 2” meant in the two-stage process

Several Innovate UK competitions — including earlier Smart programme formats and related schemes such as Analysis for Innovators — ran a two-stage process. Here is how it worked:

  • Stage 1: expression of interest. A short, screening-style application. No full financials, no detailed project plan — just enough for Innovate UK to judge whether your idea fit the competition’s scope and was worth a full application. For example, the Analysis for Innovators competition ran a Stage 1 EOI with no funding attached, used purely to shortlist candidates.
  • Stage 2: the full application. Applicants who passed Stage 1 were invited to submit the complete bid. A sample Stage 2 application form from Imperial College’s “Innovate at Imperial” programme states explicitly: it exists “to enable you and your team to start working up your full application if you have been shortlisted after Stage 1 and invited to apply formally.” Stage 2 applications included detailed technical proposals, project finances, risk plans, and declarations such as previous public funding received — Analysis for Innovators’ Stage 2, for instance, required applicants to declare earlier funding so Innovate UK could check compliance with the £315,000 Minimal Financial Assistance cap over a three-year rolling period.

After submission, bids went through eligibility checks, then technical assessment by independent assessors — typically up to five experts drawn from business and academia, who scored applications against published criteria. Notably, the Innovate UK SMART competition did not include an interview stage, so the written application was everything.

What a Stage 2 application covered

The Stage 2 question set typically required:

  • Project description and technical approach — the innovation, the technical uncertainty or risk, and how the work addresses it.
  • Market opportunity — evidence of market demand, route to market, and the plan for commercialisation and economic impact.
  • Project plan — deliverables, milestones, timelines, and a capable team.
  • Cost breakdown and funding — staff costs, subcontractors, equipment and materials, overheads, with the grant covering a defined percentage depending on company size and research type.
  • Risks and mitigation — realistic risks (contractor failure, recruitment delays, technical dead ends) with a management and mitigation plan for each.
  • Value for money — justification that the public money would buy a proportionate return.

USABite’s analysis: The two-stage design was a time-saving device for everyone. Stage 1 filtered out scope mismatches cheaply, so assessors spent their effort only on serious bids — and applicants avoided spending the 40–80 hours a full application typically demanded (a figure cited by grant consultancy GrantHero) on an idea that was never in scope.

The current status of Smart Grants

Here is the fact that matters most right now: according to official government guidance, Smart Grants are now closed for new applications, as funding is being aligned to Innovate UK’s new strategic direction. A final impact evaluation report has been published, and applicants are directed to Innovate UK’s latest funding opportunities instead.

What to do instead: practical options for UK innovators

If you were researching Smart Grant Stage 2 with a live project in mind, the practical next steps are:

  • Check Innovate UK’s current open competitions on the Innovation Funding Service — many current rounds follow a similar stage-1/stage-2 or single-stage application structure.
  • Look at Innovation Loans (£100,000 to £2 million) for later-stage R&D and commercialisation — these offer below-market interest rates and flexible terms.
  • Consider Knowledge Transfer Partnerships if your innovation would benefit from an academic collaboration, or Horizon Europe for larger, collaborative programmes.
  • If you’re in Scotland, note the separate SMART: SCOTLAND grants for feasibility studies — though the Scottish Government paused new applications, with a new fund expected in late autumn 2026.

Whatever the scheme, the Stage 1/Stage 2 discipline still applies: prove the idea fits the scope quickly, then invest in the full application only once you have been invited to compete.

Frequently asked questions

What is Smart Grant Stage 2?

Stage 2 is the full, detailed application in a two-stage Innovate UK grant process. After passing a short Stage 1 expression of interest, invited applicants submit a complete bid covering the technology, market, finances, team, risks, and value for money. Smart Grants themselves are now closed to new applications.

Who could apply for a Smart Grant?

UK-registered businesses, typically with at least one SME leading or partnering on the project. Projects had to be business-led, technologically novel, carried out in the UK, and demonstrate a clear route to commercialisation and economic impact.

How much funding did Smart Grants provide?

Project funding requests typically ranged from £100,000 to £2 million, with Innovate UK covering up to 70% of eligible R&D costs for small businesses. Exact amounts, durations (usually 6 to 36 months depending on the round), and funding rates varied by competition and project type.

What should I apply for now that Smart Grants are closed?

Check Innovate UK’s current open competitions on the Innovation Funding Service, plus Innovation Loans (£100,000–£2 million), Knowledge Transfer Partnerships, and Horizon Europe. Always read the current competition brief and eligibility criteria before starting an application.

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