Yellow, an asset financier for solar energy and digital devices in Africa, says it has raised $14m series B funding in a round led by Convergence Partners with participation from the Energy Entrepreneurs Growth Fund, managed by Triple Jump, in addition to follow-on investment from Platform Investment Partners.
Following the new funding, the startup says it plans to deepen its reach in its current markets such as Malawi, Rwanda, Uganda, Zambia, and Madagascar, launch digital and financial products in the near-term, and prepare for future debt funding rounds to ramp up its growth.
The new round brings the total debt and equity funding raised by Yellow to $45m.
“The newly injected capital is being used to leverage more debt finance to reach more customers with financed smartphones and solar systems. While the business will broaden its product offering to include other mobile financial services, growth will be fueled primarily by deepening our expertise in our existing product categories,” said Yellow founder and CEO, Mike Heyink.
Yellow claims to be profitable having recorded a compound annual growth rate of 265 per cent over the last four-year period. The startup says its network of 1100 agents, who source and make applications for asset finance on behalf of customers through its proprietary Ofeefee app, has enabled it to penetrate and reach over 400,000 customers in its five markets.
Yellow was founded and launched in Malawi in 2018 by Mike Heyink and Maya Stewart, to initially bring solar energy to the country, which is among those with the lowest access to electricity in the world. It has since grown its footprint across Africa and increased its product offering to include electronics like smartphones.
The startup’s small home solar system, comprising a 6W-10W panel, 20-50Wh battery, 4 lights, cellphone charger and radio, remains its most popular product. It also sells solar systems with bigger capacities and smartphones.
Overall, in the last 10 years, startups in Africa’s off-grid solar sector have attracted over $2.3bn in funding, according to the biennial Gogla-World Bank report released in October last year.
Commenting on the Yellow investment, Convergence Partner CEO, Brandon Doyle, said, “We are excited to be backing the Yellow team. We have been tracking the off-grid solar power asset finance space for many years but have failed to find a business model and team that we felt we could back until now.”