The Inter-American Development Bank’s (IDB) venture capital arm Multilateral Investment Fund has agreed to inject another US$5 million into NXTP Labs, urging the business accelerator to stimulate the growth of more technology startups in Latin America.
The IDB made a similar investment in NXTP Labs for the first time in 2013. This time, the accelerator has been told to focus on tech-driven social enterprises.
NXTP Labs stated in a press release that it will use the capital to fund about 30-40 companies operating in technology verticals, including fintech, agtech, edutech, cleantech, e-commerce, and software as a service (SaaS), among others.
The accelerator provides seed funding, office space, and mentoring in exchange for an equity stake in startups. Over the past few years, it has invested in 184 technology companies in Latin America.
The IDB money will be infused into its Impact Fund, which the accelerator wants to invest in companies mainly in in Argentina, Paraguay, and Uruguay.
NXTP Labs also holds conferences and exhibitions elsewhere in the world, offering a stage for entrepreneurs to put their projects on display. Such events, the accelerator believes, will bring entrepreneurs face to face with potential investors.
“In Latin America we see an abundance of opportunities for investing in high impact technology companies. When faced with similar risk/return profiles, the third derivative of our investment process is social impact,” said Ariel Arrieta, Co-founder of NXTP Labs.
In the last few years, NXTP Labs says it supported companies with innovative technological solutions that ‘democratize access to products and services previously unavailable to large parts of the population’ in the region.
“NXTP Labs’ Impact Investing Fund is an effective response to the emergence of socially conscious and dynamic entrepreneurs increasingly focused on solving big pressing societal problems by leveraging the power of technology,” the IDB stated in a press release.