Yellow, a solar energy and digital devices asset financier in Africa, has secured $14 million in Series B funding round led by Convergence Partners.
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.
