Yellow, an asset financier for solar energy and digital devices, has announced that it has raised $14 million in series B funding led by Convergence Partner, with participation from the Energy Entrepreneurs Growth Fund managed by Triple Jump, as well as follow-on investment from Platform Investment Partners.
Following the new funding, the business wants to expand its presence in existing markets such as Malawi, Rwanda, Uganda, Zambia, and Madagascar, offer digital and financial products in the near future, and prepare for future debt funding rounds to accelerate its growth. Yellow’s total debt and equity capital now stands at $45 million.
“The newly injected capital is being leveraged to obtain additional debt financing to reach out to more clients with financed smartphones and solar systems. While the company will expand its product offering to include other mobile financial services, “growth will be driven primarily by deepening our expertise in our existing product categories,” said Mike Heyink, Yellow’s founder and CEO.
Yellow claims to be profitable, with a compound annual growth rate of 265% over the last four years. According to the business, its network of 1100 agents that find and apply for asset finance on behalf of customers via its proprietary Ofeefee app has allowed it to penetrate and reach over 400,000 customers across five markets.
Mike Heyink and Maya Stewart founded and launched Yellow in Malawi in 2018 with the intention of initially bringing solar energy to the country, which has one of the world’s poorest access to energy. It has now expanded its influence throughout Africa and expanded its product offering to include devices such as smartphones.
The startup’s most popular product is their compact home solar system, which includes a 6W-10W panel, a 20-50Wh battery, four lights, a cellphone charger, and a radio. It also sells larger capacity solar systems and smartphones.
According to the biennial Gogla-World Bank report released in October last year, businesses in Africa’s off-grid solar sector have raised more than $2.3 billion in capital over the last ten years.
Convergence Partner CEO Brandon Doyle remarked of the Yellow investment, “We are excited to be backing the Yellow team.” We have been following the off-grid solar power asset finance industry for many years but have yet to find a business plan and team that we feel we can support.”