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Meta Description: Discover IDB Lab’s latest call for venture capital funds aimed at fostering innovation and inclusion in Latin America and the Caribbean. Learn how to apply and transform emerging ecosystems today.

Introduction

The landscape of venture capital in Latin America and the Caribbean (LAC) is poised for significant growth and transformation. IDB Lab, the innovation arm of the Inter-American Development Bank, has unveiled a new funding opportunity designed to empower venture capital funds that drive development and social inclusion in the region. This initiative aims to bridge critical financing gaps, especially for early-stage entrepreneurs in underserved markets.

About IDB Lab’s Call for Proposals

Since 2021, IDB Lab has actively supported the growth of VC funds through its Calls for Proposals, providing equity financing to investment management firms focusing on LAC. The latest call invites venture capital funds to submit proposals by September 30, 2025, for consideration in 2026.

Objectives of the Call

IDB Lab’s investment seeks to:
– Tackle Development Barriers: Address challenges faced by poor and vulnerable populations.
– Bridge Financing Gaps: Focus on sectors and business models with unmet investment demand.
– Promote Innovation: Enhance social inclusion and economic growth through strategic venture capital investments.

Eligibility Criteria for Fund Managers

To participate, fund managers must meet several key requirements:

Alignment with IDB Lab’s Investment Thesis

Funds must align with one of the following approaches:
1. Nascent and Emerging Ecosystems: Invest in early-stage markets like Central America, the Caribbean, and certain South American countries (e.g., Ecuador, Paraguay).
2. Regional Funds: Promote regional integration by targeting both developed and emerging ecosystems.
3. Sector-Specific Funds: Focus on high-impact sectors such as Health/Biotech, Edtech, Agtech, and Climatetech.

Geographic Focus

Investment Mandate: At least 80% of the fund’s investments must target companies within LAC.

Stage of Target Investments and Minimum Fund Size

Investment Stage: Pre-seed to Series B.
Minimum Fund Size: USD 20 million.

Team Qualifications

A qualified management team should demonstrate:
– Track Record: Experience in making and managing early-stage investments.
– Regional Presence: Active involvement in the LAC region.
– Dedicated Effort: Significant time commitment to the fund.
– Complementary Skills: Diverse expertise within the team.
– Sector Expertise: Knowledge in the targeted sectors.
– Deal Sourcing Ability: Proven capability to source investments within LAC.

Impact Mainstreaming and Measurement

Fund managers must incorporate a transformational or impact-oriented mission into their investment strategy, focusing on:
– Vulnerable Populations: Enhancing access to essential goods and services.
– Economic Growth: Supporting SMEs with increased digitalization and productivity.
– Environmental Benefits: Promoting sustainable practices and innovations.

Commitment to Gender and Diversity

A strong commitment to advancing gender and diversity at both the fund manager and portfolio company levels is essential.

Application Process

How to Apply

Interested investment management firms should:
1. Submit an Online Application: Complete the designated online form.
2. Provide an Investment Deck: Include detailed information about the fund.

Selection and Due Diligence

Initial Screening: Proposals undergo a thorough review by IDB Lab’s committee.
Eligibility and Due Diligence: Selected firms will undergo comprehensive due diligence.
Final Approval: Successful proposals receive final approval from IDB Lab’s Donors Committee.

Ecosystem Growth Catalyst Fund: A Model for Success

Farstar’s Ecosystem Growth Catalyst Fund exemplifies the kind of strategic investment design that aligns with IDB Lab’s objectives. Targeting industries like fintech, medical devices, and web3 technologies, the fund emphasizes data-driven approaches, community support, and innovative growth strategies to accelerate market fit and drive sustainable growth in emerging ecosystems.

Key Features of the Ecosystem Growth Catalyst Fund

Technology Partnerships: Leveraging collaborations to create scalable startup models.
Growth Circles: Fostering community-centric approaches to nurture entire ecosystems.
Educational Ventures: Partnering with universities to maintain a continuous pipeline of innovation.
Local Community Engagement: Supporting grassroots initiatives to propel economic development.

Why Apply to IDB Lab’s Call?

Participating in IDB Lab’s funding opportunity offers numerous benefits:
– Proven Strategies: Tailored approaches for emerging markets.
– Extensive Networks: Access to industry experts and strategic partners.
– Sustainable Growth: Focus on long-term behavior shifts and inclusive programs.
– Economic Impact: Drive job creation and economic development in LAC.

Conclusion

IDB Lab’s new venture capital funding opportunity is a pivotal initiative for fostering innovation and inclusion in Latin America and the Caribbean. By aligning with strategic investment theses and focusing on impactful sectors, fund managers can play a crucial role in transforming emerging ecosystems.

Ready to make a difference? Explore how you can contribute to the growth of LAC’s venture capital landscape and apply for IDB Lab’s funding opportunity today!