The innovation laboratory of the Inter-American Development Bank, IDB Lab, has approved an investment of $3 million in the GridX II regional fund to promote the creation and development of science-based ventures with a special focus on biotechnology. This investment will allow us to bet on solutions to environmental, inequality, and health issues raised by a maximum of 75 deeptech startups in our region.

Companies with a deeptech approach in Latin America share challenges derived from the lack of knowledge and infrastructure necessary to commercially scale scientific and technological ventures that respond to the most pressing social and environmental problems. In addition, science and technology-based startups have been practically neglected by the entrepreneurial capital industry in the region since, unlike digital-based ventures, they usually require long research periods in academia before achieving a functional prototype.

"Establishing effective mechanisms for the creation, acceleration, and investment in deeptech startups is one of the most important elements for the take-off of the entrepreneurship and innovation ecosystem of our region and to take advantage of its enormous potential and that of its researchers," said Irene Arias, CEO of IDB Lab.

Grid X, a fund with a deeptech investment thesis that already launched a financial year in 2017, now seeks to expand into Latin America from its initial focus in Argentina and significantly increase the startups in its portfolio and follow-up investments in the most promising companies. About half of its portfolio is expected to focus on companies addressing climate change-related issues and the other half on those focused on health issues. Both sectors demand new forms of production and consumption through our region's significant scientific or technological advances.

The Investment Model of GridX II aims to act as a bridge between scientists and entrepreneurs so that they jointly create and invest in science-based companies at the height of a new wave of innovation marked by the bio-revolution, which can have a significant impact on the economies and lives of people, from health to agriculture, consumer goods, energy, and materials.

This operation follows the investment thesis IDB Lab drew up in 2021 to help close persistent gaps in early-stage financing in Latin America and the Caribbean. The strategy includes investing in venture capital funds specialized in high-impact sectors, such as deeptech, with a regional approach that encompasses nascent or emerging ecosystems and those more developed ones.