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Financing-products
Financing Products

We accompany the business innovation cycle by mobilizing resources that close financing gaps

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Specialized and Versatile Offer

IDB Lab has several products designed to finance early-stage innovation that can be combined and customized to best support clients based on the maturity of their business.

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Prototype Projects                                                                  

(up to US$150,000)

How to apply

These are used to test products, services, technologies, and other innovative solutions at an early stage but with high potential for growth and impact, on a small scale and with increased agility.

Prototype Projects are expected to generate development impact and market data so that private or public sector project partners can adopt regional solutions.  

Prototype Projects typically have three components: 

  1. Design the solution: technology or product
  2. Testing
  3. Evaluation, production, and dissemination of knowledge 

Each project usually includes non-reimbursable technical cooperation, sometimes combined with contingent recovery financing.

The preparation and approval process takes two to four months, and projects are executed in less than 18 months. 

Projects are usually presented or executed by the actors of the entrepreneurial ecosystem. Counterpart funding for prototypes must be at least 20% of the total project cost.
 

Prototype Projects

Startups and initiatives under proof-of-concept

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Spark Projects
(US$250,000 - US$700,000)

How to apply

These projects test innovative solutions and business models that can be deployed, scaled, or replicated during the execution of the project or at a later stage with IDB Lab investment products and other financial support from the IDB Group. 
These projects may arise from thematic challenges or entrepreneurs working on topics aligned with IDB Lab's priorities.

These projects are funded through contingent recovery financing and/or non-reimbursable technical cooperation. 

Activities supported with technical cooperation funds are advisory services in designing and implementing solutions, training, monitoring, evaluation, knowledge products, and events. Technical cooperation does not cover administrative and overhead costs. Hardware and other equipment purchase and investments cannot exceed 30% of IDB Lab’s total contribution. Non-reimbursable technical cooperation resources require a counterpart of at least 50% of the total funds for Spark Projects. The design and approval process takes four to six months, and projects are executed in two to three years. 

Spark Projects

Innovative social enterprises and startups in market validation stage

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Investments in VC Funds                      Contact email: vcfunds@iadb.org

(US$2M - US$5M)

Guidelines

With this product, IDB Lab seeks to reduce critical barriers to generate a greater impact on development and social inclusion, with particular emphasis on poor and vulnerable populations in Latin America and the Caribbean (LAC). It also seeks to reduce financing gaps in countries, sectors, and business models where there is an unmet demand for investment in early-stage ventures.

IDB Lab has an open call for venture capital funds focusing on Latin America and the Caribbean. For more information, please read the guidelines.

Investment terms:

Fund managers wishing to be considered for an IDB Lab investment must meet the following requirements:                                                                        

1- Alignment with IDB Lab's investment thesis.

IDB Lab seeks to invest in venture capital funds aligned with at least one of the following four approaches:

Nascent Ecosystems: Funds investing primarily in nascent or emerging ecosystems such as Central America, the Caribbean, and selected South American markets (Peru, Ecuador, Paraguay, Uruguay, and Bolivia).

Regionalization of Funds: Funds with a regional strategy that promotes regional integration and knowledge transfer from more mature markets to emerging markets in LAC while targeting more developed ecosystems.

Sector-Specific Funds: Specialized in high-impact sectors that present marked structural capital gaps because of unmet demand by early-stage entrepreneurs, such as health and biotechnology, technology for education and labor, agricultural or food technology, and climate technology, among others.

Diversity-focused funds: funds led by a diverse team in terms of ethnicity, race, and gender and with an equally diversity-focused investment thesis.

2- Geographic focus

 The mandate should be to invest at least 80% of the funds in LAC companies.

3- Stage of target investments and minimum fund size

Early-stage investment funds (Pre-seed to Series B) with a minimum size of US$20M. Funds classified under the "Nascent and Emerging Ecosystems" investment thesis require a minimum fund size of US$10M.

4- Team

Qualified management team with:

a) Track record or experience in making and managing early-stage investments.

b) Experience and presence in the LAC region.

c) Full -or significant-time commitment to the fund.

d) Complementary skills in team management (financial, operational, business, etc.).

e) Experience in eligible projects and/or enterprises related to the sector.

f) Demonstrated ability to obtain agreements from LAC countries with a relevant pipeline of potential investments.

g) Presence of at least one female member in the relevant committees of the Fund (e.g, Board, Investment Committee, or Advisory Committee).

5- Mainstreaming and Impact Measurement

A fund manager with a transformative or impact mission clearly embedded in the fund's investment strategy.

6- Gender and diversity

Strong commitment or intentions to promote gender and diversity at the fund manager and portfolio company levels.

Equity Investment

Venture Capital Funds

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Equity and quasi-equity investment    Contact email: directequity@iadb.org

(US$750,000 - US$2M)

Guidelines

With this product, IDB Lab seeks to invest in early-stage, capital-constrained, high-impact companies. Leveraging its position as the only multilateral institution fully dedicated to early-stage innovation ecosystems, IDB Lab can play a catalytic role by investing in businesses that: (i) have exceptional impact accelerating inclusion, environmental sustainability, and dynamic growth in LAC; (ii) have strong potential to achieve financial sustainability and business scalability; but (iii) are not fully satisfied in terms of capital supply from the venture capital industry, given the novelty of the business model, market segment or geography.

With this focus, we seek to generate transformative, more precise, and vertical impact on the main bottlenecks that limit inclusion related to the most pressing development problems in the region. Our objective with this product is to invest in ambitious entrepreneurs with outstanding business models that align exceptionally with IDB Lab's areas of work and a clear potential for systemic transformation in LAC. IDB Lab always co-invests with experienced partners.

Investment terms:

We selectively invest in outstanding companies that align with our priorities.

Companies wishing to be considered for IDB Lab investment through direct equity and quasi-equity must meet the following requirements: market traction for pre-Series A to Series B stage innovative companies, track record of fundraising, proven willingness to co-invest by qualified institutional investors (with a strong VC track record), and exponential, scalable and sustainable growth potential. IDB Lab invests in market conditions.

Equity and Quasi-equity Investment

Startups

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Debt Products                                         Contact: loans_IDBLab@iadb.org

(US$500,000 - US$2M)                             

Guidelines

With these products, IDB Lab seeks to provide innovative and sustainable solutions that contribute to the social and economic development of low-income and excluded populations.

To this end, we provide loans to scale high-impact start-ups by bridging the debt financing gap. We also lend to financial intermediaries to amplify their impact with innovative and transformative solutions.

Investment terms:

Financing at market rates, commensurate with the level of risk, mostly dollar based. Local currency options may be considered on an exceptional basis: they must be justified and with currency risk mitigants.

Institutions/companies wishing to be considered for IDB Lab investment through debt products must meet the following requirements:

  1. A clear impact on poor and vulnerable populations.
  2. Provide new and innovative solutions to target populations’ economic, social, or environmental challenges. (Innovations according to the local context).
  3. Have a clear strategy for sustainability and scalability.
  4. Considers financial additionality (without displacement of private sector financing).
  5. The counterpart must have the technical capacity to execute the loan-financed project.
  6. The counterpart must demonstrate repayment capacity.
  7. Alignment with IDB Lab's verticals and cross-cutting goals.

 

Contact: loans_IDBLab@iadb.org

Debt Products

Innovative companies

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Ecosystem Projects 

(US$750,000 - US$2M)

How to apply

Rather than supporting a particular business model or solution, Ecosystem Projects improve conditions and funding for projects developing a new industry or venture sectors with high potential for positive social and environmental impact. 

These projects are born from a multi-stakeholder design, including partnerships with ecosystem actors such as accelerators, corporations, funders, research, and impact centers, among others. 

Ecosystem Project amounts vary depending on the scope of the project and counterpart resources, often in the form of non-reimbursable technical cooperation, sometimes supplemented by contingent recovery resources. Counterpart funding is expected to be at least 50% of the total project cost. The design and approval process takes four to six months, and projects are executed in two to three years.

Ecosystem Projects

Building entrepreneurship ecosystems and nascent industries

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