Malawian asset financier Yellow has closed $14 million in series B funding to expand its business, which involves digital and financial products related to connectivity and solar power.
Convergence Partners led the round; the Energy Entrepreneurs Growth Fund and Platform Investment Partners participated.
Convergence Partners, a leading private equity investment manager focused on the technology sector in sub-Saharan Africa, describes Yellow as a leading provider of pay-as-you-go finance for off-grid solar home systems and connectivity solutions for low-income consumers in parts of East Africa.
In 2018, Mike Heyink and Maya Stewart founded Yellow in Malawi. Since then, it has expanded across Africa. The company's most popular product is a small home solar system, including a 6W-10W panel, 20-50Wh battery and cellphone chargers. It also sells solar systems and smartphones.
According to the Techpoint Africa news service, Yellow wants to use the funds to expand its presence in its current markets, including Malawi, Rwanda, Uganda, Zambia and Madagascar, while preparing for additional debt funding rounds to accelerate its expansion.
It also plans to leverage more debt financing to reach more customers with financed smartphones and solar systems. Customers make a deposit for these and then pay the remaining balance in monthly instalments.
The startup operates through a network of 1,100 agents using its proprietary tech platform Ofeefee, which enables last-mile distribution and credit provision. Using this model, Yellow has, according to Convergence Partners, become a catalyst for change and a model for leveraging technology to solve the most pressing problems of everyday African households.
Since entering the market in 2018, Yellow has rapidly grown its reach to more than 400,000 households across its current markets. Yellow claims a compound annual growth rate of 265% over the past four years.