Lipa Later, a Kenyan buy-now-pay-later (BNPL) fintech company, recently faced a significant downfall, transitioning from celebrating a $10 million investment to being placed under administration. This sudden turn of events sheds light on the volatile nature of Africa’s emerging tech sector. On March 24, 2025, Joy Vipinchandra Bhatt of Moore JVB Consulting assumed control of Lipa Later, officially placing the company into administration under Kenya’s Insolvency Act of 2015.
Established in 2018, Lipa Later gained traction in the market by offering hire purchase services, allowing consumers to purchase goods and pay in installments with upfront costs covered by the company. This business model resonated well in Kenya, providing access to essential and aspirational products in a market with varying levels of financial inclusion. The company garnered investor trust, securing $12 million in seed funding in early 2022, building on previous investments from notable startup accelerators.
However, Lipa Later’s growth started to stagnate in 2024. Despite a $10 million funding round towards the end of the year, the financial pressures continued to mount. Reports surfaced of employees facing unpaid salaries for months, leading to uncertainty among the workforce. Suppliers also struggled to receive overdue payments, with at least one public legal dispute exposing the company’s fragile financial situation.
One notable incident that added to Lipa Later’s financial challenges was a legal dispute with Africa Foresight Group (AFG), a consultancy based in London. In April 2022, AFG sued Lipa Later for an unpaid fee of $13,516 for a market report. In December 2024, the Kenyan High Court ruled in favor of AFG, acknowledging Lipa Later’s admission of the debt in internal communications. This legal setback not only increased the company’s financial burden but also highlighted its struggles in managing financial obligations.
Additionally, allegations of trade secrets theft emerged, with Lipa Later accusing a former employee of violating their employment contract by joining a competitor and potentially using confidential information to launch a competing BNPL product. While the court dismissed the injunction request due to insufficient evidence, the case underscored the intense competition in the fintech sector and the challenges companies face in safeguarding intellectual property.
The acquisition of the e-commerce platform Sky.Garden in December 2023 for KES 250 million ($1.9 million) raised concerns about Lipa Later’s financial decision-making during a period of financial strain. The rationale behind acquiring a distressed entity amid existing financial challenges remains unclear and may have further strained the company’s resources.
The appointment of an administrator signifies a crucial juncture for Lipa Later. Bhatt’s primary focus is to engage with stakeholders, including creditors, who have until April 23, 2025, to submit their claims. The administrator will assess the company’s financial health and explore recovery options such as restructuring, selling the business, or potential liquidation. The removal of the company’s directors from control of its assets emphasizes the severity of the situation.
Lipa Later’s collapse serves as a cautionary tale for Africa’s tech startup ecosystem. While the BNPL model holds promise in markets with large unbanked populations, it is susceptible to economic downturns, funding shortages, and intense competition. The company’s failure to secure additional funding post-2023 debt round proved fatal, leading to insolvency.
In the upcoming weeks and months, the administrator faces the daunting task of navigating debts, legal issues, and serious allegations to determine Lipa Later’s future. The company’s downfall highlights the risks and rewards of innovation in emerging markets, where rapid growth and potential challenges like trade secrets theft can swiftly lead to a collapse. In today’s fast-paced world, it can be easy to overlook the importance of self-care. With so many demands on our time and energy, taking care of ourselves often falls to the wayside. However, self-care is crucial for maintaining our physical, mental, and emotional well-being.
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