Convergence Partners finances Yellow Series B funding
Investment management firm Convergence Partners has announced the closure of its investment in Yellow, an African distributor of pay-as-you-go solar home systems.
Yellow also provides connectivity solutions for low-income consumers in parts of East Africa.
The Andile Ngcaba-led investment firm announced the development in a statement, saying this is the fourth investment in Convergence Partners’ third fund.
Convergence Partners’ $300 million third private equity fund focuses on high-growth digital infrastructure companies throughout Africa.
Providing the rationale for the Yellow investment, Convergence Partners notes that the Africa-focused company has become a catalyst for change and a model for using technology to solve critical challenges on the continent.
Since entering the market in 2018, Yellow has rapidly grown its reach to more than 400,000 households across Malawi, Rwanda, Uganda, Zambia and Madagascar.
Convergence Partners says: “Lack of access to consumer finance lies at the heart of African consumer pain points, as it inhibits asset ownership and their associated services and by leveraging innovative technology and disruptive distribution models through its proprietary tech platform ‘Ofeefee’, which enables last-mile distribution and credit provision, Yellow has become a catalyst for change and a model for leveraging technology to solve the most pressing problems of everyday African households.”
Brandon Doyle, CEO of Convergence Partners, adds: “We have been tracking off-grid solar power asset finance space for many years, but have failed to find a business model and team that we felt we 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.”
For Michael Heyink, CEO of Yellow, says having Convergence Partners as shareholders will cushion the company on its expansion on the continent.
He says: “They are investors with great vision. As a management team, we believe they will add huge value in helping us deliver digital and financial inclusion across Africa."