IDB Lab and IDB Natural Capital Lab Trust Fund to create new fund for bioeconomy startups
The US $4M IDB Group financing will benefit approximately 15 established bioeconomy startups and their value chains in the Amazon region.
The new financing will increase the flow of capital into regenerative economy projects (activities that restore and upgrade natural capital, rather than extract or only maintain its current value) through the development of a stronger pipeline of enterprises among the seven countries: Bolivia, Brazil, Colombia, Ecuador, Guyana, Peru, and Suriname. The additional investment in regenerative projects will result in an increased area of landscapes under improved management that will protect biodiversity.
The project will launch a US $4M fund ($2M from the IDB Lab and $2M from the France-IDB Natural Capital Lab Trust Fund) with flexible investment capital to fill financing gaps, scale businesses and boost the regenerative economy in Latin America and the Caribbean (LAC).
Sectors targeted include non-timber forestry, certified forest products, biopharma, ecological services, regenerative agriculture, biomedicine, bio beauty, bio packaging, bio cleaning products, and essential oils, among other businesses that regenerate natural ecosystems.
Up to 15 bioeconomy enterprises already operating with a Minimum Viable Product (MVP) will receive support to transform them into scalable businesses, capable of attracting and absorbing investments from this project as well as private capital.
To structure and deliver investments, the IDB Group will partner with Kaeté Investimentos, which is one of the region´s most focused fund management firms specialized in financing bioeconomy businesses. The fund will make use of flexible and customized financial instruments including debt and equity.
About Kaeté Investimentos
Kaeté Investimentos is a venture capital/private equity firm founded in 2011. Kaete specializes in minority growth equity investments in middle market companies that (i) have low-income consumers as their target market, (ii) have a relevant social and economic impact on low-income families and cooperatives located on underprivileged communities with scarce opportunities for jobs or entrepreneurial activities, and/or (iii) promote a better and more sustainable use of natural resources. http://www.kaeteinvestimentos.com.br
About Natural Capital Lab
The Natural Capital Lab is a joint venture program of the IDB’s Climate Change and Sustainability Division with the IDB Lab. It is a risk-tolerant hub, which pursues a pioneering agenda of innovative projects and solutions to support all parts of the IDB Group (IDB, IDB Invest, IDB Lab) and IDB member countries to innovate in conservation finance. Its focus includes mainstreaming biodiversity, blended finance, early stage funding for entrepreneurs, leveraging private investment, business incubation, knowledge and quality data provision, market ecosystem support and technical assistance. The government of France is the founding donor of the Natural Capital Lab Trust Fund, and its resources will support this project. https://www.iadb.org/en/environment/natural-capital-lab
About IDB Lab
IDB Lab is the IDB Group’s innovation laboratory to promote development through the private sector by identifying, supporting, testing and piloting new solutions to development challenges and seeking to create opportunities for poor and vulnerable populations in the LAC region. To fulfill its role, it engages and inspires the private sector and works with the public sector when needed. www.idblab.org/en