South African startup Yellow has raised $ 23 million in debt financing. The funding round was led by London-based investment bank Lion’s Head Global Partners.
Yellow was founded in 2018 to deliver life-changing tech-focused energy financing products to low-income households in Africa. To date, it has provided power on a pay-as-you-go basis to 30,000 homes in Malawi and Uganda, where the company specializes in providing asset-backed finance to households in underserved areas that lack access to electricity, financial services and connectivity .
The capital injection comes nearly two years after Yellow raised $ 3.3 million from institutional investors in a Series A funding round. Prior investors include Triple Jump, SunFunder, SIMA and Trin.
The new money will be used to support the company’s growth in Malawi and Uganda, where the company hopes to reach 100,000 customers. It will also be used to help Yellow expand into alternative markets and verticals.
“We were delighted to close our Series A in May 2020, that funding together with the debt facilities from our new partners give us the resources we need to serve at least one million more people,” said Ross Thompson, Yellow’s CFO.
In general, the shape of Africa’s investment landscape is a mixed picture. Although venture capital firms invested a record $ 5.2 billion in the continent in 2021, this was largely down to a small number of big-ticket investments in Nigerian FinTechs like Flutterwave.
Earlier this year, PYMNTS reported on a lack of seed-stage funding on the continent. Female founders especially have struggled to attract investment. Last year, female founders only received 0.7% of all fundraising raised by startups on the continent, equivalent to $ 18 million out of almost $ 2.7 billion.
More on this: Africa’s VC Ecosystem: Lack Of Seed-Stage Funding, Tough Landscape For Female Tech Founders