MALAWI – Yellow, a fintech startup which finances alternative energy in Malawi and Uganda, has received a US$23 million loan to expand its footprint.
SA startup Lion’s Head Global Partner, a London-based private investment bank specialising on emerging and frontier countries, especially Africa, led the funding round
Founded in 2017 by Michael Heyink and Maya Stewart, the startup uses an online platform to sell solar kits for African households.
Essentially, Yellow leases equipment to persons outside standard electricity distribution networks. The money is reimbursed periodically at a set interest rate in the service agreement.
Yellow has enhanced energy availability for over 400,000 people while also reducing CO2 emissions by 12,000 tons per year by replacing kerosene with clean solar illumination and other devices. In addition, the company has created approximately 800 jobs in the area.
Yellow builds cutting edge software to enable its sales force to serve customers in Africa, explains Ben Walwyn, Yellow’s CTO and architect of Ofeefee, the company’s end-to-end platform.
He says, “The products that make life better for every day African households exist but getting them to people and providing affordable financing is what’s needed.”
Yellow’s asset-backed finance offering has delivered revenue growth of 350% per annum.
It is rapidly emerging as one of the continent’s most promising start-ups, but the journey has been anything but linear.
The off-grid solar market has been notoriously difficult to crack, with many pioneers in the sector building great products but being plagued by the challenges of last mile distribution and consumer financing.
From the outset, the founders of Yellow were aware of the pressing need to demonstrate a profitable and scalable business model. “In the early days, we relied on common sense and hard work, but after 12 months, the business was failing, and our plans were not working.
“Almost as a last resort, we began to tinker with digital solutions in places where it had not been tried before. This changed everything,” says Michael Heyink, Yellow’s chief executive.
Fast-forward four years and Yellow has brought electricity for the first time to over 240 000 households. With the youngest and fastest growing population on earth, the African consumer presents an exciting segment of customers to serve.
Yellow believes that it all starts with energy, but that their customers, more than anything else, want devices to access the internet and digital services tailored to their needs.
Having established a solid operating base in Malawi, Yellow has expanded to Uganda, Rwanda and Zambia.
There are still 570 million people in Sub-Saharan Africa who do not have access to power and meeting the UN Sustainable Development Goal (SDG7) of universal energy access by 2030 will necessitate scaling up highly effective firms.
Liked this article? Subscribe to DealStreet Africa News, our regular email newsletter with the latest news, deals, and insights from Africa’s business, economy, and more. SUBSCRIBE HERE