PRODUCTS
Our value proposition includes connections, knowledge, and financing to propel innovation by supporting entrepreneurship and bringing together relevant like-minded partners.
Photo by Helena Lopes from Pexel
Connections
IDB Lab strives to reduce the inclusion gap and transform the region articulating platforms that connect players for promoting the use of technology with applications for inclusion, co-creating innovative solutions, and developing thematic innovation ecosystems.
Product page Connections content list
LACChain is a global alliance integrated by different actors in the blockchain environment and led by IDB Lab for the development of the blockchain ecosystem in Latin America and the Caribbean. The objective is to accelerate the enablement and adoption of blockchain technology in the region to foster innovation, reduce economic, social, gender and all inequalities, to promote job quality and security, promote financial inclusion, consumer protection and market integrity. To achieve this, LACChain focuses on two big pillars: community and infrastructure.
fAIr LAC is a partnership between the public and private sectors, civil society and academic institutions, designed to influence public policy and the entrepreneurial ecosystem in the promotion of the responsible and ethical use of artificial intelligence.
WeXchange is the largest platform in Latin America and the Caribbean that connects women entrepreneurs with mentors and investors in the region. WeXchange was founded in 2013 with the aim of unleashing the growth potential of women entrepreneurs in STEM (Science, Technology, Engineering and Mathematics) in Latin America and the Caribbean.
The Sustainable Agriculture, Food and Environment (SAFE) Platform is a multi-stakeholder alliance initiated by IDB Lab, and co-founded by leading global food companies, donors and non-governmental organizations that share a common vision: improve the livelihood of farmers through the adoption of climate-smart agricultural practices, transforming the farming landscapes of the Latin American and Caribbean region.
Latitud R (formerly the IRR) is a regional multi-sectorial platform for the coordination of actions, investments, and knowledge in the field on inclusive recycling and circular economy. Its purpose is to contribute to the development of recycling markets throughout the continent, advance the formalization and improvement of conditions of grassroots recyclers in the frame of waste management systems, and develop an inclusive circular economy in Latin America and the Caribbean.
The BetterTogether Challenge is a global initiative to crowdsource innovative solutions from anywhere in the world to improve the lives of Venezuelans and communities hosting them across Latin America and the Caribbean.
The project BID3(BID ao Cubo) aims to connect the Brazilian innovation ecosystem with its peers from Latin America and the Caribbean countries; to expand the outreach and inclusiveness of key innovation hubs to last-mile geographical regions of Brazil and promote the culture and adoption of innovation within the public sector. Cubo is one of the main co-creation hubs of LAC and this is the first project in which the IDB Group partners with an innovation ecosystem to internationalize a national ecosystem; create channels to foster business opportunities, co-investments, and scalability of regional startups focused on impact.
Knowledge
We co-create, curate, and disseminate practical knowledge to solve inclusion challenges in Latin America and the Caribbean
We generate forums to disseminate high-value knowledge about trends in inclusion, and provide a space for the exchange of ideas that will spark new projects and ventures.
Financing
IDB Lab offers a wide array of financing products that can be mixed and matched to better support our clients. Our objective is to bridge key financing gaps for innovative startups and companies that drive inclusion and systemic change in Latin America and the Caribbean.
Discovery Products
IDB Lab Discovery products finance innovative projects that generate opportunities for entrepreneurs and vulnerable populations and raise the living standards of low-income people and communities, through private sector led-solutions. Discovery products include: 1) Prototype Projects: up to US$150K, 2) Spark Projects, with funding usually from US$250k to US$700k, and 3) Ecosystem Projects, which they are usually US$1 MM or more.
Investment Products
IDB Lab invests both directly and indirectly in companies to unlock the development potential for inclusion and environmental sustainability in LAC. For our indirect investments, we invest in VC funds and debt funds to promote a wide array of entrepreneurs and sectors and to help expand the frontiers of VC markets and geographies. For direct financing (equity/quasi-equity and debt), we selectively identify highly impactful early ventures addressing key development challenges in LAC, and mostly invest alongside trusted VC co-investors.
How to apply to our products
- Discovery Products: Tutorial / Contacts in Country Offices
- VC Funds Investments: Guidelines / Contact
- Equity Investments: Guidelines / Contact
- Loans: Contact
Call for proposals
We promote challenges and prizes to discover innovations and business models that can be applied to solve social problems and promote inclusion in the region.
1. Investments in Funds
Investments in VC Funds
Impact thesis: Through its investment in VC funds, IDB Lab seeks to contribute to tackle critical barriers for greater development impact and social inclusion with a special focus on poor and vulnerable populations across LAC, bridging key financing gaps in countries, sectors and business models in which there is an unsatisfied demand for investments from early-stage entrepreneurs.
Ticket size: US$3M-US$5M
Product characteristics: IDB Lab has launched a Call for Proposals. for investment management firms seeking IDB Lab's equity. financing for venture capital funds with focus on Latin America and the Caribbean. Find our applicant guidelines here.
Fund managers who wish to participate in the selection process must be aligned with at least one of the following approaches:
Nascent Ecosystems: Funds targeting as primary markets nascent or emerging early-stage ecosystems such as Central America, the Caribbean, and selected markets in South America, such as Peru, Ecuador, Paraguay, Uruguay, and Bolivia.
Regionalizing Funds: Funds with regional strategy, which in addition to targeting more developed early-stage ecosystems include nascent or emerging ecosystems to promote regional integration and knowledge transfer from more mature to emerging VC markets within LAC.
Sector-specific Focus: Funds specializing in high-impact investments and sectors with pronounced structural capital gaps resulting from unmet demand by early-stage entrepreneurs.
Diversity Lens Investing Fund: IDB Lab seeks to promote gender-ethno-racial diversity in the LAC Venture Capital industry by anchoring the first LAC VC Fund that adopts a "Diversity Lens" investment thesis focused on investing in companies led by a gender-ethno-racially diverse group of founders.
Investments in Venture Debt and other Debt Funds
Impact thesis: We recently started to invest in debt funds that provide startups and companies with venture debt and/or other innovative debt instruments. With this, we aim to promote a new type of funds that gives access to dilution-free loans for highly impactful, revenue-positive startups and innovative companies.
Ticket size: US$1M- US$3M
Product characteristics: These funds provide loan to innovative companies, for example senior debt with collaterals often in the form of receivables or warrants or other debt products.
For more information on investments in funds contact us.
2. Direct Equity & Quasi-Equity Investments
Impact thesis: We make direct equity and quasi-equity investments to reach exceptional businesses not yet fully satisfied in terms of capital availability by private VC funds. This represents a “vertical” approach whereby IDB Lab can select with greater precision those business models that could be pivotal for addressing key development challenges and transformational in their impact.
IDB Lab’s investments mostly require co-investment from trusted and experienced VC investors.
Ticket size: US$700k-US$2M.
Eligibility requirements: i) have exceptional impact potential towards inclusion and/or environmental benefits, with a focus on the IDB Lab’s strategic areas; ii) have innovative business models coupled with solid financial sustainability profile and clear scalability paths; iii) are in bridge to Series A, Pre-Series-B and selectively in Series B fundraising stages, iv) previous fundraising record and proven willingness to co-invest by qualified institutional investors (with a solid track record in VC). Market terms and so-called “most-favored-nation (MFN)” clause to co-investors.
Product characteristics: We provide a wide array of instruments, including preferred stock, Simple Agreement for Future Equity (SAFE), and convertible notes, among others.
For more information on direct equity and quasi-equity investments contact us.
3. Loans & Debt Products
Loans for Early Stage Companies and Financial Intermediaries
Impact thesis: We make loans to fuel the initial scale of high impact companies by bridging the debt financing gap. We also provide loans to financial intermediaries to amplify their impacts with innovative and transformative solutions.
Ticket size & terms: US$1M- US$3M market-based pricing, commensurate with the risk level. Mostly USD based, but also offer some local-currency denominated loan with/without guarantee.
Product characteristics: We use a wide array of instruments to best serve our clients, including senior and subordinated debt with the option to convert, revenue-based loans, impact discount loans, among others
Social Entrepreneurship Program (SEP)
Impact thesis: The Social Entrepreneurship Program (SEP) is IDB Lab’s innovative social business financing program. This program supports innovative social businesses that generate impact in local communities, leveraging business innovations to expand their impact and scalability. SEP supports innovative business model that directly and clearly benefit low income and vulnerable populations.
Ticket size & Terms: long-term debt (4-8 yrs) of up to US$1M and grant up to US$250.000, requiring local counterpart contribution.
Product characteristics: SEP provides a combination of long-term debt and grant, where the purpose of the grant is to facilitate integrate and support adoption of innovation. Proposed projects must deliver new solutions to economic, social, environmental challenges faed by low income and vulnerable populations in their local context.
1. Prototype Projects
Protype projects test highly innovative, early stage technologies, products, business models, and/or solutions with agility in a small scale to measure results, so they can be scaled up, if successful, at a later stage. Prototypes projects are expected to generate development impact and market data so solutions can be adopted by project partners. Prototype projects usually have three components: 1) design of a solution: such as a technology or a product, 2) testing of the solution, and 3) knowledge generation and dissemination. Each project might include non-reimbursable technical cooperation and contingent-recovery financial grant resources, to a maximum combined IDB Lab support of US$150K per project.
Preparation and approval process take 2-4 months, and projects are executed in less than 18 months. Projects are usually presented or executed by actors in the ecosystem and entrepreneurship ecosystem. Counterpart funding for prototypes must be at least 20% of total project cost.
2. Spark Projects
Spark projects pilot innovative solutions and business models that could be scaled-up or replicated, either during project execution or in a subsequent stage with IDB Lab investment products and other financial support from the IDB Group. These projects may arise from challenges on a particular topic, or from specific entrepreneurship and ecosystems actors in topics aligned with IDB Lab thematic pillars, and guiding principles.
Funding to spark projects usually goes from US$250k to US$700k, often in the form of non-reimbursable technical cooperation funding, sometimes complemented with contingent recovery funding, and/or investment products as well.
Activities supported with technical cooperation funding are advisory services in the design and implementation of solutions, trainings, monitoring, evaluation, knowledge products, events. Existing administrative costs and overhead are not covered with technical cooperation funding. Acquisition of hardware and other purchases of equipment and investments are not a main activity to be financed with technical cooperation, and it could not exceed 30% of total IDB Lab contribution. Non reimbursable technical cooperation resources require a match of at least 50% of total funds for Spark projects. Design and approval process take 4-6 months, and projects are executed in two to three years.
3. Ecosystem Projects
The purpose of an ecosystem project is to support the generation and implementation of innovations in topics that are relevant for the IDB Lab Mandate such as XXI Century Skills, Agtech, Healthtech, Workertech, Digital Financial Services, Water, Energy, Mobility, Housing and Connectivity among others. Instead of supporting a particular business model or solution, the ecosystem projects improve the conditions and financing of projects that develop a new industry or sectors. These projects are born from multi-stakeholder design, including partnering with ecosystems actors, such as accelerators, corporate venturing actors, funders, impact hubs, and others.
Funding amounts to ecosystem projects vary, depending on project scope and counterpart resources funding, but are usually below US$1,000,000, often in the form of non-reimbursable technical cooperation funding sometimes complemented with contingent recovery funding, and/or investment products as well. Counterpart funding of at least 50% of total project cost is expected. Design and approval process take 4-6 months, and projects are executed in two to three years.
Other Discovery projects
Innovations sometimes cannot be fit into pre-existing categories. Some IDB Lab discovery projects might be different in nature from the three types of projects above.