From First Bet to Functioning Market: Three Questions Shaping the Conversation at GET Forum in Quito

By Kusi Hornberger, Chief Strategy Officer at IDB Lab

When IDB Lab's predecessor - the Multilateral Investment Fund (MIF) - made its first venture capital investments in Latin America in the 1990s, the asset class was still nascent, with few local managers, limited track records and scarce exit precedents. The pitch asked institutional investors to price a market that had not yet been built.

Last year, venture investors deployed $2.2 billion in early-stage rounds across Latin America and the Caribbean, according to LAVCA. One can debate whether that volume is large or modest; what is beyond debate is that a functioning asset class now exists where none did. And it was not passive patience that built it. It was active construction: a pioneer fund that proved a local manager could emerge, a first exit that proved capital could return, targeted regulatory reforms here, repeat founders there. All of it driven by early risk-takers willing to commit before the evidence was settled.

Which raises the sharper question: If the venture capital market could be built from scratch, what markets can we build next?

The Missing Bridge

Aggregate volume often conceals structural bottlenecks. The majority of venture capital pools in a handful of capital cities, established sectors, and familiar consumer business models. Ecuador, host of this week's GET Forum, illustrates the pattern. A new diagnostic of its dynamic entrepreneurship ecosystem maps it precisely: abundant entrepreneurial energy across the country, but an acute cliff where high-potential ventures should transition into scalable, investable businesses.

The binding constraint across Latin America and the Caribbean is rarely a shortage of founders. It is the missing bridge between what growing enterprises require and the type of capital and operational support on offer.

Consider a tangible example from our own portfolio. The 500 LatAm Luchadores III fund, backed by IDB Lab in 2020, now holds 111 startups. One-third feature a female founder- placing it in the top quartile of the more than 100 funds we have supported - and in 2024, its portfolio companies reached over 13 million clients. Five of these companies are Ecuadorian: Aora, Databits, Reliv, Picker, and TAXO. Crucially, all five now sell into Mexico. Their expansion illustrates how regional platforms can connect companies to customers beyond their home markets. Last year, IDB Lab committed $2 million to the fund's successor vehicle, designed squarely to catalyze early-stage ecosystems like Ecuador.

I joined IDB Lab five weeks ago as Chief Strategy Officer with a straightforward mandate: to determine which markets the region needs next, and what catalytic tools are required to construct them. IDB Lab has entered a new phase, aligned with the IDB Group's institutional strategy to scale entrepreneurial innovation into sustainable development impact. Our collective ambition is clear: Improve 50 million lives, help 1.5 million growth firms improve productivity, and put more than $1 billion in resources to work.

As I host our four GET Insights sessions in Quito on Tuesday afternoon, designed to share data and knowledge, three core questions travel with me:

1. Which markets are worth building next?

The imported venture capital power-law playbook was engineered to hunt consumer outliers, and it has delivered remarkable success stories. Yet an exclusive focus on consumer tech unicorns provides an incomplete roadmap for an economy where most formal employment sits in enterprises that may never list on a public exchange.

The aperture must widen toward dynamic enterprises that compound steadily in agriculture, healthcare, logistics, climate adaptation, and industrial productivity - ventures that deliberately balance commercial viability with social impact.

Frontier technology accelerates this shift. Latin America's primary opportunity is rarely about training foundational AI large language models from scratch; it lies in building on top of the global technology stack and tailoring it to regional realities.

One compelling example in a fund we recently backed might look unglamorous at first glance: software for independent auto repair shops that bundles voice-based diagnostic tooling, parts procurement, and embedded working capital, now supporting more than 1,400 workshops. Nobody will label it a unicorn. It represents something far more transformative: systemic productivity for the real economy.

Which markets come next that can deliver financial sustainability, poverty reduction, resilience and deep, systemic inclusion simultaneously?

2. What knowledge does the region most need now?

Development economists produce research and evidence, but builders on the ground need actionable insight. We are designing a demand-driven approach to our research agenda at IDB Lab to serve as a strategic searchlight - one that sharpens our selectivity and uncovers emerging technologies, innovative business models, and frontier market opportunities.

We want to probe the pragmatic questions that shift capital allocation and support decision-making. Here are a few of the core research questions we are hearing:

• AI and the Base of the Pyramid: How is artificial intelligence fundamentally altering startup unit economics, and expanding the capacity to understand and serve lower-income populations?
• High-Growth Startups & Impact: What is the empirical link between high-growth B2B ventures, quality job creation, SME productivity, and broader economic growth?
• Frontier Technologies: How will deep tech, physical AI, and quantum technologies emerge in Latin America and the Caribbean, and what tangible opportunities do they create for local builders?

Before we finalize our upcoming research pipeline, we want the field's input: What critical operational intelligence is missing today, and where do you see the greatest opportunity to co-fund or collaborate on building the answers?

3. What impact are these markets creating?

A market can be financially liquid and still fail the communities it was intended to serve. The only way to know the difference is rigorous, empirical evidence.

Strengthening that evidence architecture is central to the strategy we are executing at IDB Lab:

• Refining the theory of change that links our catalytic investments directly to tangible development outcomes.
• Sharpening investment theses from day one, explicitly articulating the anticipated impact, the beneficiaries, and the measurement framework before capital is deployed.
• Deploying real-time analytical tools to track poverty reduction, climate resilience, and gender equity across our active portfolio, rather than treating evaluation as an ex-post compliance exercise.

The objective of impact measurement is not passive reporting; it is active steering. It gives us the early operational feedback needed to know whether our capital is driving systemic development, and the clarity to correct course when it is not. Furthermore, the evidence that gives us confidence is precisely what mobilizes the private and institutional capital these markets still require.

How do you measure impact without burdening early-stage founders - and what tools or benchmarks actually help you steer capital better?

Mobilizing the Wisdom of the Ecosystem

Connections are infrastructure, just like transport networks or digital fiber. GET Forum exists to build and solidify those links.

These three questions are not academic exercises. We are actively shaping IDB Lab's forward-looking strategy, knowledge agenda, and impact framework right now. Because market creation is fundamentally driven by collective intelligence, I intend to guide our agenda the same way: drawing from diverse, on-the-ground market perspectives rather than a single desk.

Thirty years ago, a bold cohort of institutional pioneers bet that this region could support an innovation ecosystem, and they were proven right.

Let's build the next markets together.

GET Forum 2026 takes place October 5-7 in Quito, Ecuador. Learn more at https://www.getforumlac.org.