The round also included participation from the Energy Entrepreneurs Growth Fund managed by Triple Jump, and follow-on investment from Platform Investment Partners.

Founded in 2018 in Malawi by Mike Heyink and Maya Stewart, Yellow was built on a goal to bring solar energy to a country with low access to electricity. Since then, it has expanded across Africa and diversified its product offerings to include smartphones and other electronics.

With the new funding, Yellow plans to expand its presence in its current markets, which include Malawi, Rwanda, Uganda, Zambia, and Madagascar. It also intends to launch digital and financial products in the near term and prepare for future debt funding rounds to accelerate its growth. The recent funding brings Yellow’s total equity funding to $45 million.

Yellow claims to be profitable and has achieved a compound annual growth rate (CAGR) of 265% over the past four years. The startup has built a network of 1,100 agents who use the proprietary Ofeefee app to source and submit asset finance applications on behalf of customers. This approach has allowed Yellow to reach over 400,000 customers across its five markets.

Among Yellow’s product offerings, its small home solar system, which includes a 6W-10W panel, 20-50Wh battery, 4 lights, cellphone charger, and radio, remains the most popular. The company also sells solar systems with larger capacities and smartphones.

For the small and large solar home systems, users make a deposit of $10 and $68, respectively, and pay the balance through monthly installments spread over six and 24 months.

Mike Heyink, Founder and CEO of Yellow, expressed excitement about the company’s growth and its impact on the African consumer. Yellow envisions enabling millions of people to prosper by joining the digital global economy for the first time.

The investment in Yellow reflects the sustained interest in startups that make solar energy accessible in Africa. Cleantech emerged as the second most-funded sector, after fintech, with $863 million raised in equity funding for cleantech startups in Africa, according to the 2022 Partech Africa report.

Convergence Partner CEO, Brandon Doyle, noted his elation in backing the Yellow team, highlighting the company’s alignment with their investment strategy. Yellow addresses the triple challenge of financial inclusion, green energy distribution, and broadband penetration while serving unbanked communities in Africa’s lowest-income countries profitably.

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This achievement is despite subdued private capital fundraising on the Continent in 2022.

The recent close of CPDIF marks a significant milestone for the company, as it represents Convergence Partners ’ largest fund to date, bringing total funds under management to more than $600m.

The close was backed by a combination of existing and new investors comprising leading global and regional development finance institutions (DFIs), pension funds and financial institutions based in Europe and Africa.

CPDIF was launched in June 2020 and had a first close of $120m in July 2021. The Fund is focused on investing in digital infrastructure opportunities across sub-Saharan Africa.

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This includes investments in fibre networks, data centres, wireless, towers, cloud, Internet of Things (IoT), artificial intelligence (AI) and other critical digital infrastructure that is vital for the growth of the digital economy in the region.

In addition to investing in physical assets, CPDIF is also aimed at developing and supporting initiatives that promote access to education, financial services, healthcare, and other essential services through digital technologies.

The last 20 years have seen internet penetration in sub–Saharan Africa grow exponentially as a result of investments in enabling infrastructure. Since inception, Convergence Partners has seen the need to invest in this space, motivated at the time by the ITU’s The Missing Link/Maitland Report. Years later there is still more work to be done if we wish to close the digital divide and ensure that the Africa is able to reap the benefits from the current and next iteration of the technologies.

“The closing of CPDIF is a major step forward for Convergence Partners and for the development of the digital economy in sub-Saharan Africa,” says Brandon Doyle CEO and Founding Partner of Convergence Partners – “This closing is just the beginning, and we look forward to working with our investors and partners to build the digital infrastructure required to support the growth of the region’s digital economy. We strongly believe such collaborations promote innovation, entrepreneurship, skill development, and job creation by vastly expanding access to the internet and all the essential digital tools it provides.”

Convergence Partners has played a crucial role in ensuring the sustained growth of digital technologies across sub-Saharan Africa and is committed to continuing to support the growth and development of the region’s digital economy through investments in critical digital infrastructure.

“We are extremely grateful for the continued support of our repeat investors and the new support given to us from first-time investors that have joined us on this journey to address the challenge of the digital inclusion across the Continent, one technology at a time. As we are 7 years away from 2030 we commit to addressing SDGs and preparing Digital Infrastructure for Africa which is soon to be home to 2 Billion people with the youngest population on our planet,” says Andile Ngcaba, Chairman and Founding Partner at Convergence Partners.

“We will continue to build on our original vision by investing in digital infrastructure that is a key enabler for digital inclusion. This Fund will enable us to continue leveraging our deep knowledge of technology, investments and the African market to deliver measurable impact.”

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