Financial Struggles Detail Africa's Buy Now, Pay Later (BNPL) Technology Sector on Brink of Administration
Lipa Later, a Kenyan buy-now-pay-later (BNPL) fintech, has entered administration, marking a significant setback for the company and raising concerns within the tech industry.
Founded in 2018, Lipa Later offered consumers the ability to purchase goods in installments, a service that quickly gained popularity. However, the company's rapid growth and expansion into Uganda and Rwanda, coupled with macroeconomic challenges in Kenya, led to financial distress.
In 2022, Lipa Later secured $12 million in seed funding. Yet, the following year, the company began to face financial pressures, with reports of employees facing unpaid salaries and suppliers pursuing overdue payments. The weakening Kenyan shilling and frequent changes in taxation and importation policies further impaired the company's ability to secure additional funding and maintain operations.
The purchase of the e-commerce platform Sky.Garden for KES 250 million ($1.9 million) in December 2023 raised concerns about Lipa Later's financial judgment, potentially stretching the company's resources even further.
In April 2022, Africa Foresight Group sued Lipa Later for an unpaid fee of $13,516. The Kenyan High Court sided with Africa Foresight Group in December 2024, acknowledging that Lipa Later had admitted to the debt.
By March 2025, Lipa Later was under the control of a court-appointed administrator, Joy Vipinchandra Bhatt of Moore JVB Consulting LLP. The administrator faces the complex task of navigating a web of debts, legal issues, and serious allegations, including trade secrets theft against a former executive who joined a competitor in March 2024.
The administrator will evaluate the company's financial health, explore potential recovery options such as restructuring, selling the business, or potential liquidation. A bidding process initiated post-administration involved Engage Capital and other investors considering acquisition or financing options.
The story of Lipa Later serves as a cautionary tale for Africa's tech startup ecosystem. It underscores the challenges and risks in the tech industry, including operational cash flow problems, failed fundraising efforts, and the impact of macroeconomic factors. The collapse of Lipa Later is not just about a failed startup; it's a reminder of the necessity for sound financial management and the need to navigate the intense competition in the tech industry.
As the coming weeks and months will be critical in determining Lipa Later's future, the broader Kenyan and African tech ecosystems view this event as a stark reminder of the financial pressures and the importance of responsible financial management in the rapidly evolving tech landscape.
[1] TechCabal. (2025). Lipa Later: The Kenyan Buy-Now-Pay-Later Fintech That Fell Apart. Retrieved from https://techcabal.com/2025/03/26/lipa-later-the-kenyan-buy-now-pay-later-fintech-that-fell-apart/
[2] Ventures Africa. (2025). Lipa Later: The Rise and Fall of a Kenyan Fintech Startup. Retrieved from https://venturesafrica.com/2025/03/29/lipa-later-the-rise-and-fall-of-a-kenyan-fintech-startup/
[3] Business Daily Africa. (2025). Lipa Later Co-Founder Proposes High-Cost Loan to Save Fintech Firm. Retrieved from https://www.businessdailyafrica.com/news/lipa-later-co-founder-proposes-high-cost-loan-to-save-fintech-firm/
[4] African Business. (2025). Lipa Later's Administrator Faces Complex Task. Retrieved from https://www.africanbusinessmagazine.com/news/lipa-laters-administrator-faces-complex-task/
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