Kenyan Buy-Now-Pay-Later (BNPL) startup Lipa Later has been placed under administration as it battles severe financial distress. A public notice issued on March 24 confirmed that Joy Vipinchandra Bhatt of Moore JVB Consulting has been appointed as the administrator, tasked with overseeing the company’s business, assets, and affairs.
Under the Insolvency Act 2015, Section 563 (2)(b), the administrator assumes control of the company without personal liability. As a result, Lipa Later’s directors can no longer carry out transactions involving company assets without Bhatt’s express approval.
“All matters, operational or otherwise, pertaining to the affairs of the company shall be directed to the administrator or their authorized representatives,” reads part of the official notice.
Creditors Given Deadline for Claims
To help resolve the company’s financial difficulties, the administrator is now engaging stakeholders and has requested creditors to submit full details of any claims by April 23, 2025.
Lipa Later’s Rise and Fall
Founded in 2018, Lipa Later built its brand around financing retail purchases by paying suppliers upfront and collecting customer payments in installments. The startup raised over KES 1.36 billion through debt and equity rounds to support its expansion into multiple African markets.
In 2023, the firm raised KES 500 million in private debt, alongside a KES 9 million crowdfunding campaign on Republic, which attracted 84 investors and closed in October. That same year, Lipa Later acquired Sky.Garden, a local e-commerce platform, for KES 250 million.
CEO Eric Muli previously reassured investors, stating the crowdfunding was aimed at balancing the company’s debt-to-equity ratio, not due to financial strain.
“We have adequate funding. This public crowdfund is to improve our debt-to-equity ratio,” Muli said in 2023.
Financial Cracks Begin to Show
Trouble became apparent when Africa Foresight Group filed an Insolvency Notice (E022 of 2023) in Nairobi’s High Court, demanding KES 1.75 million (USD 13,516). The filing warned of potential liquidation proceedings, signaling the beginning of Lipa Later’s financial unraveling.
What’s Next?
With administration now in effect, the focus will shift to evaluating the company’s solvency, protecting stakeholder interests, and potentially restructuring operations. Whether Lipa Later can recover or be forced into liquidation remains to be seen.
This development adds to the growing list of Kenyan tech startups facing insolvency, reflecting the high-risk nature of fintech in emerging markets despite robust funding rounds and rapid scaling.
Conclusion:
Lipa Later’s descent into administration is a sobering reminder of the fragility of Kenya’s startup ecosystem. While its ambitious growth once inspired optimism, its current crisis underscores the importance of sustainable financial management in the tech space.
