Africa’s energy landscape has long been plagued by limited access to electricity, particularly in rural areas. However, thanks to the emergence of innovative startups like Yellow, the continent is experiencing a paradigm shift as solar energy is harnessed to power not only homes but also digital devices. Yellow, founded in Malawi in 2018, has recently raised $14 million in Series B funding, propelling its mission to provide affordable and sustainable energy solutions to millions of Africans.
The Birth of Yellow: Empowering Malawi with Solar Energy
Yellow was established in 2018 by Mike Heyink and Maya Stewart with the aim of bringing solar energy to Malawi, a country with one of the lowest rates of electricity access worldwide. Recognizing the transformative potential of solar power, the founders set out to make it accessible to the masses. Since its inception, Yellow has expanded its reach across Africa and broadened its product portfolio to include smartphones, thus bridging the digital divide as well.
Securing Funding for Expansion
Yellow’s commitment to its mission has attracted significant attention from investors. In its recent Series B funding round, the startup raised an impressive $14 million. Convergence Partners, a leading investment firm, led the round, joined by the Energy Entrepreneurs Growth Fund managed by Triple Jump and follow-on investment from Platform Investment Partners. This influx of capital will enable Yellow to deepen its presence in its current markets, which include Malawi, Rwanda, Uganda, Zambia, and Madagascar.
Fueling Growth: The Vision for the Future
With the fresh injection of funds, Yellow has ambitious plans for expansion. The startup intends to further penetrate its existing markets while simultaneously launching digital and financial products. By leveraging its expertise and network, Yellow aims to reach more customers with financed smartphones and solar systems. The company also has its sights set on future debt funding rounds to accelerate its growth trajectory. This strategic approach positions Yellow as a key player in Africa’s solar energy and digital revolution.
A Profitable Venture: Yellow’s Impressive Growth
Yellow’s financial success is a testament to its commitment to sustainable growth. The startup boasts a compound annual growth rate (CAGR) of 265% over the past four years. This is a remarkable achievement by any standard. Yellow attributes its profitability to its extensive network of 1100 agents. The agents utilize the proprietary Ofeefee app to source and facilitate asset finance applications on behalf of customers. This efficient and scalable model has allowed Yellow to penetrate the market and serve over 400,000 customers across its five operating countries.
Empowering African Communities: Yellow’s Product Offering
Yellow’s product portfolio is designed to cater to the diverse energy needs of African communities. At the core of its offerings is the small home solar system, a popular choice among customers. This system includes a 6W-10W panel, a 20-50Wh battery, four lights, a cellphone charger, and a radio. These essential components provide a reliable and sustainable source of electricity to households that are off-grid or have limited access to power. Additionally, Yellow offers solar systems with larger capacities to accommodate the energy requirements of different users.
Affordable Financing: Making Solar Energy Accessible
One of the key factors driving Yellow’s success is its pay-go model, which provides asset-based financing for solar kits and lanterns. This approach allows customers to gradually own the solar equipment by making affordable monthly payments.
To initiate the purchase, users pay a deposit of $10 for small home solar systems and $68 for larger systems. The remaining balance is then remitted through monthly installments spread over six to twenty-four months. This flexible and accessible financing model has been instrumental in enabling Yellow to reach a wide range of customers across Africa.
The Impact of Yellow: Empowering Africa’s Underserved Communities
Yellow’s impact extends far beyond the provision of solar energy. By bridging the energy gap, the startup is empowering African communities to join the digital global economy for the first time. This newfound access to electricity and digital devices has the potential to transform lives and drive economic development. With millions of people now prospering as a result of Yellow’s efforts, the startup is at the forefront of Africa’s sustainable and inclusive growth.
A Growing Trend: Investment in Solar Energy Startups
Yellow’s recent funding success is indicative of a broader trend in the investment landscape. Investors are increasingly recognizing the potential of solar energy startups, particularly those focused on making clean energy accessible in Africa. According to the 2022 Partech Africa report, cleantech emerged as the second most-funded sector in Africa, attracting $863 million in equity. This represents 18% of the total funding raised by African startups, highlighting the significant interest in sustainable energy solutions.
A Bright Future: Yellow’s Role in Africa’s Energy Transformation
Yellow’s recent funding round and its plans for expansion position the startup as a key player in Africa’s energy transformation. By tackling the triple challenge of financial inclusion, green energy distribution, and broadband penetration, Yellow is driving positive social impact while ensuring profitability. The startup’s commitment to empowering underserved communities and its dedication to innovation in the solar energy sector make it a catalyst for change in Africa’s evolving energy landscape.