Innovate UK Opens a £33m Quantum Hardware Competition. For Deeptech Founders, Non Dilutive Capital Is Worth Chasing.
Updated: Oct 11
When the conversation turns to how founders raise money, it almost always turns to equity.
Who led the round, at what valuation, on what terms. It is worth pausing on the quieter alternative, because on 29 June a new pot of it opened. Innovate UK is inviting UK registered organisations to apply for a share of up to 33 million pounds to build device level hardware and the software that runs it, aimed at the scale, programmability and runtime performance that universal fault tolerant quantum computers will need.
The competition opened on 29 June and closes on 18 September 2026.
The specific technology matters less than the mechanism. This is grant funding, and grant funding is non dilutive. A founder who wins a share of this money gives away no equity, no board seat and no liquidation preference to get it. For an early company, that is not a minor accounting distinction. It is the difference between funding a critical piece of research and development on your own terms and selling a slice of the company to do it.
That is why non dilutive capital sits squarely within this publication's interest in how founders build and who holds power in a capitalised company. The structural problem in early stage funding is well documented. Equity capital is unevenly distributed, concentrated in a handful of networks, and founders outside those networks, whether by geography, background or simply who they know, raise less and give away more to get it.
Grants do not solve that on their own. But they are one of the few routes where the decision rests on the quality and ambition of the work rather than on a warm introduction, and they let a founder reach a later, stronger position before they ever have to negotiate with an equity investor.
The practical detail founders need is simple. The funding is open to UK registered organisations. The scope is device level quantum hardware and associated software. Applications opened on 29 June and the window closes on 18 September 2026, which is a genuine deadline rather than a rolling one, so a serious bid needs to start now. Innovate UK, part of UK Research and Innovation, runs a steady stream of these competitions across sectors, and the discipline of watching for them and applying is an underused skill among founders who default to thinking capital only comes from investors.
There is a longer arc here too. Non dilutive grants and dilutive equity are not rivals. Used well, they compose. A founder who funds early technical risk with grant money reaches the point of raising equity with more proof, more ownership retained and more leverage in the room. As tokenised equity and secondary trading through the UK's new private market infrastructure make it easier to raise incrementally and later, the founders who benefit most will be the ones who delayed dilution as long as they sensibly could. A grant competition is one of the plainest ways to do that. It is worth chasing.
This piece is general information for founders, not financial advice. Eligibility and terms are set by Innovate UK and applicants should check the competition guidance directly.
Key takeaways
Innovate UK opened a competition on 29 June offering a share of up to 33 million pounds for device level quantum computing hardware and software, closing 18 September 2026.
The funding is non dilutive, meaning founders give away no equity, no board seat and no preference to access it.
Grants reward the quality of the work rather than network access, making them a route that is structurally fairer to founders outside the usual funding circles.
Non dilutive grants and equity compose well. Funding early risk with grants lets founders raise later, stronger and with more ownership intact.
Sources
How we got here
The competition sits inside a longer national programme. In the Autumn Statement of 24 November 2023, the government set out five quantum missions under a £2.5 billion quantum strategy. The first mission is that by 2035 the UK should have quantum computers capable of running one trillion operations, performing well beyond classical supercomputers on useful problems. Competitions like this one fund the hardware layer that mission depends on.
The formal title is Scaling performance of quantum computing hardware: CR&D, and it is run jointly by Innovate UK and the Department for Science, Innovation and Technology. The UKRI listing gives the dates quoted above. The Innovation Funding Service listing, which was later updated, now shows a closing time of 11am on 2 October 2026. Both listings now show the competition as closed.
What it means for UK founders
The detail in the guidance shapes who can realistically win. Grants cover part of the project, not all of it. A micro or small business can claim up to 70% of eligible costs for industrial research, a medium business up to 60% and a large business up to 50%. The balance has to come from somewhere, and for most startups that means equity. This is where grants and equity combine in practice: the grant reduces how much a founder needs to raise, but rarely removes the need altogether.
The competition was also collaboration only. The lead had to be a UK registered business or a research and technology organisation, academic institutions could not lead, and no single partner could account for more than 75% of eligible costs. An organisation could lead only one application. For a small hardware company, that means building partner relationships with universities, other businesses or research bodies well before a competition opens, not in the weeks before a deadline.
Grant income can also affect other parts of a company's finances, including research and development tax relief claims. Founders may want to take professional advice on how a grant interacts with those claims before they apply.
Key facts at a glance
Total fund of up to £33 million, with grant requests of £1 million to £3.5 million per project.
Projects run for 24 to 36 months, starting by 1 February 2027 and ending by 31 January 2030.
No single enterprise can receive more than £3 million in this competition.
An online briefing was held on 7 July 2026, and the recording is on the competition page.
Applicants are due to be notified of decisions on 9 November 2026.
Further reading
Frequently asked questions
How much funding is available in the Innovate UK quantum hardware competition?
Innovate UK is offering UK registered organisations a share of up to 33 million pounds to build device level quantum hardware and the software that runs it. The aim is the scale, programmability and runtime performance that universal fault tolerant quantum computers will need.
When does the Innovate UK 33 million pound quantum competition close?
The competition opened on 29 June and closes on 18 September 2026. It is a fixed deadline rather than a rolling window.
Who can apply for the Innovate UK quantum hardware funding?
The funding is open to UK registered organisations working on device level quantum hardware and associated software. Eligibility and terms are set by Innovate UK, so applicants should check the competition guidance directly.
What does non dilutive grant funding mean for a startup founder?
Non dilutive funding such as an Innovate UK grant means the founder gives away no equity, no board seat and no liquidation preference to receive it. Funding early technical risk this way can let a founder raise equity later with more proof and more ownership retained.
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