Yellow has closed a Series C round led by Convergence Partners, with Susquehanna Sustainable Investments participating. The amount was not disclosed, and no valuation was given.

Founded in Malawi in 2018 by Mike Heyink and Maya Stewart, and now run out of Cape Town, Yellow finances off-grid solar home systems and smartphones on pay-as-you-go terms for households that cannot pay upfront. It has passed one million customers across seven markets.

The business is consumer lending dressed as distribution. Yellow runs its own AI-enabled credit scoring to assess customers with no formal credit record, then sells solar systems and handsets on instalments through more than 1,500 local agents, with over 200 staff.

Its smartphone business has more than doubled year on year, which is where the growth now sits. Convergence Partners also led the $14-million Series B in 2023, by which point Yellow had raised roughly $45-million in debt and equity combined. Four of its markets, the DRC, Nigeria, Rwanda and Uganda, were selected in March for GSMA pilots of entry-level 4G handsets priced near $40, about R650, which shows how far device affordability still trails network coverage.

The 10 million customer target by 2030 needs ten times the current base inside four years.

Disrupt Africa reported the raise and Heyink's framing of the capital as broadening impact on the continent rather than hitting a return target. African-Startups noted Susquehanna Sustainable Investments joined the round and that the smartphone book has more than doubled. Africa Private Equity News carried Convergence chief executive Brandon Doyle's statement that the firm retains confidence in the business and its management team.

An undisclosed Series C led by the same investor who led the Series B reads two ways. It can signal conviction from the party who knows the numbers best or no new lead priced the round and nobody wants a valuation on the record. Neither is stated, so treat the silence as information rather than a verdict.

The model itself is not in doubt. Yellow lends to customers with no credit history for two things they cannot function without: power and a phone, and the phone book is doubling. Set that against the local market, where contract prices have climbed at twice the rate of the handsets themselves.

The lesson for founders is that the interesting margin often sits in the financing layer rather than the product.

You might also like our piece on SA phone contract prices rising twice as fast as the phones, the Comsol 5G network Convergence Partners also backs, and what the revised electricity pricing policy means for anyone weighing off-grid options.

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