South Africa-based solar energy and digital devices asset financier Yellow has raised US$14 million in Series B funding to deepen its reach in its existing markets.
Founded in 2018 by Mike Heyink and Maya Stewart, Yellow focuses on the last-mile distribution of affordable “pay as you go” (PAYG) solar home systems to low-income rural households. It has expanded across the continent and broadened its product offering to include digital devices like smartphones.
Its US$14 million funding round was led by Convergence Partners, with participation from the Energy Entrepreneurs Growth Fund managed by Triple Jump as well as follow-on investments from Platform Investment Partners.
Yellow will use the funds to expand its reach in existing markets such as Uganda, Rwanda, Zambia, Madagascar, and Malawi. It also plans to launch further digital and financial products, and prepare for future debt funding rounds to ramp up its growth.
“The newly injected capital is being used to leverage more debt finance to reach more customers with financed smartphones and solar systems. While the business will broaden its product offering to include other mobile financial services, growth will primarily be driven by deepening our expertise in our existing product categories,” Heyink said.
Brandon Doyle, CEO of Convergence Partners, said his firm had been tracking the off-grid solar power asset finance space for many years, but had failed to find a business model and team it felt it could back until now.
“Yellow’s offering also sits well with our promise to our investors of strong investment returns married with solid social development impact; in this case by tackling the triple challenge of financial inclusion, green energy distribution, and broadband penetration, and doing so profitably while servicing the unbanked communities of the lowest income countries of Africa,” he said.