Yellow Africa, an African asset financier specializing in solar energy and digital devices, has successfully secured $14 million in a Series B funding round. The investment was led by Convergence Partners, with participation from the Energy Entrepreneurs Growth Fund managed by Triple Jump. Platform Investment Partners also contributed follow-on investment. The primary objective of this funding is to support Yellow’s expansion in its existing markets, which include Malawi, Rwanda, Uganda, Zambia, and Madagascar. Yellow intends to enhance its reach, launch digital and financial products, and prepare for future debt funding rounds to drive its growth. This latest round of funding brings Yellow’s total equity funding to $45 million.
According to Yellow’s founder and CEO, Mike Heyink, the newly injected capital will be used to leverage additional debt financing, enabling the company to offer financed smartphones and solar systems to a broader customer base. While diversifying its product offering to include other mobile financial services, Yellow’s primary focus will be on strengthening its expertise in its existing product categories. The company’s proprietary Ofeefee app and network of 1100 agents have played a crucial role in sourcing and processing asset finance applications on behalf of customers, contributing to its impressive penetration of the market and reach of over 400,000 customers across its five markets.
Reasons for Investment
Investors have chosen to invest in Yellow based on several compelling factors. Yellow has demonstrated remarkable growth, achieving a compound annual growth rate (CAGR) of 265% over the past four years. This strong growth trajectory showcases the company’s ability to effectively address market demand and execute its business strategies. Investors recognize the significant potential for Yellow to continue expanding its customer base and market presence, particularly in regions where access to electricity remains a critical challenge.
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Furthermore, Yellow operates within the off-grid solar sector, which has attracted considerable investment in recent years. Over the past decade, startups in Africa’s off-grid solar sector have raised over $2.3 billion in funding, highlighting the sector’s potential for financial returns. Cleantech, including solar energy, has emerged as the second most-funded sector after fintech, indicating its attractiveness to investors. Yellow’s focus on providing asset-based financing for solar kits and lanterns aligns with the growing demand for affordable and sustainable energy solutions in Sub-Saharan Africa, where a substantial portion of the population lacks access to electricity.
Investors also recognize the significant social impact of Yellow’s business model. By offering financing options for solar energy and digital devices, Yellow contributes to financial inclusion, green energy distribution, and broadband penetration. These efforts address critical developmental challenges in Africa’s lowest-income countries, positively impacting the lives of unbanked communities. Investors are attracted to Yellow’s ability to generate profitable returns while simultaneously making a substantial social contribution.
A Look at Yellow
Founded in 2018, Yellow was launched in Malawi by co-founders Mike Heyink and Maya Stewart. The company’s primary goal was to introduce solar energy solutions to a country with limited access to electricity. Since its inception, Yellow has expanded its operations across Africa, targeting markets in Rwanda, Uganda, Zambia, and Madagascar. These regions are characterized by a significant off-grid population and underdeveloped national power grids.
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Yellow’s core business revolves around providing asset financing for solar energy solutions and digital devices. The company offers a range of products, including small home solar systems with a 6W-10W panel, 20–50Wh battery, 4 lights, cellphone charger, and radio. These systems, available through a pay-to-own model, have gained popularity among customers. Users pay a deposit of $10 for small systems and $68 for larger systems, with the remaining balance paid through monthly installments spread over six or 24 months, depending on the product.
In addition to solar systems, Yellow has expanded its product offering to include smartphones. The company’s network of 1100 agents plays a vital role in sourcing and facilitating asset finance applications through the proprietary Ofeefee app. This innovative approach, combined with the extensive agent network, has enabled Yellow to penetrate the market successfully and reach over 400,000 customers across its target markets.
With the recent Series B funding round, Yellow aims to deepen its market reach, launch new digital and financial products, and prepare for future debt funding rounds. The company remains committed to leveraging its expertise in solar energy and digital devices to improve the lives of African consumers and enable their participation in the global digital economy.
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Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert.
As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard