From the perspective of industrial small and medium size enterprises (SMEs), this study explores the implementation of performance measurement practices and challenges in university-industry innovation networks. In this research, two single-case studies were conducted to explore the implementation practices and challenges of performance measurement in university-industry collaborations. Thirty Finnish SMEs in the first innovation network and 10 Finnish SMEs in the second innovation network participated in university-industry collaboration that were established to facilitate their involvement in a long-term innovation process. The results of the study revealed that industrial SMEs are interested in the performance measurement of societal-level outputs by university-industry innovation networks, even though they face challenges in understanding the aims and goals of the funding programmes. Furthermore, the results showed that the industrial SMEs understood the intellectual nature of the university-industry innovation networks, but their performance measurement activities were business related. Also the lack of understanding of the context and the process of the performance measurement in university-industry collaborations seemed to shift industrial organisations' focus to the content stage of the performance measurement and to the use of traditional performance measures and tools to estimate the advantages gained.