Lipa Later: 10 Key Things You Must Know

Overview

Lipa Later is a Kenyan fintech startup specializing in buy-now-pay-later (BNPL) services, offering consumers the ability to purchase products through installment payments via an online platform. Founded in 2015, it quickly grew to become one of Africa's promising fintech firms, gaining significant investment and attention for its innovative point-of-sale financing model. However, by early 2025, Lipa Later faced severe financial challenges, resulting in the company entering administration and raising important questions about the sustainability of BNPL businesses in emerging African markets. This article explores the story of Lipa Later with key insights into its rise, challenges, and potential future.

1. Origins and Business Model

Founded by Michael Maina, Eric Muli, and Purity Maina in Nairobi, Kenya, Lipa Later set out to revolutionize consumer credit by enabling installment payments for a wide range of products. Its model allows users to shop from partner merchants with tailored repayment plans, while the platform pays merchants upfront and collects installments from buyers over time. This point-of-sale financing approach targets consumers who may lack access to traditional credit, empowering them to afford products like electronics and home goods sustainably.

2. Rapid Growth and Investment Success

Between 2019 and 2023, Lipa Later attracted considerable investor interest, raising around $12 million in seed funding and additional conventional debt. Early backers included Cauris, Lateral Frontiers, GreenHouse Capital, and Orbit Startups, who saw potential in the company’s scalable BNPL model that was tailored for the African market. The influx of investment fueled expansion efforts and positioned Lipa Later as a significant player in Kenya's fintech space.

3. Product and Market Expansion

Building on its core BNPL offering, Lipa Later expanded its reach by acquiring struggling e-commerce platform Sky.Garden for approximately KES 250 million (about $1.9 million) in late 2023. This move aimed to strengthen its ecosystem by integrating retail and credit services, enabling customers to shop and finance purchases in a seamless environment. Additionally, the company planned to extend operations to other East African countries like Uganda and Rwanda, broadening its regional footprint.

4. Becoming a Licensed Digital Credit Provider

In March 2024, Lipa Later achieved a major regulatory milestone by being officially licensed as a Digital Credit Provider by the Central Bank of Kenya. This recognition validated its compliance with financial regulations while enhancing consumer confidence and trust. The license also allowed Lipa Later to operate under regulatory oversight, which is crucial for fintech firms dealing with consumer credit and sensitive financial transactions.

5. Financial Struggles and Entry Into Administration

Despite its promising growth, Lipa Later’s financial health deteriorated rapidly. By early 2025, the company struggled to meet obligations to employees and suppliers, with reports revealing unpaid salaries and mounting debts. Failed fundraising efforts culminated in Lipa Later entering administration on March 24, 2025, with Joy Vipinchandra Bhatt from Moore JVB Consulting appointed as administrator. This process effectively removed the existing management’s control over the company’s assets and operations.

6. Legal and Operational Challenges

During its financial distress, Lipa Later faced legal issues, including a court case from London-based consultancy Africa Foresight Group over an unpaid $13,516 consultancy fee related to a market report. Courts ruled against Lipa Later, exposing internal financial difficulties. Additionally, disputes regarding employee departures and alleged sharing of trade secrets with competitors highlighted operational risks and internal challenges beyond financial woes.

7. Investor Offers and Potential Recovery

After entering administration, several firms expressed interest in acquiring or financing Lipa Later. By mid-2025, Canadian financial services firm Engage Capital made a $24.5 million offer to acquire the fintech platform’s technology, customer base, and intellectual property, subject to due diligence and regulatory approvals. London-based Advance Global Capital also offered a loan facility up to $5 million to finance invoice factoring transactions. These developments provide hope for possible restructuring or revival of the company under new ownership.

8. Impact on the Kenyan Fintech and BNPL Sector

Lipa Later’s troubles have reverberated across the fintech ecosystem in Kenya and Africa, serving as a cautionary tale for BNPL providers. Its collapse demonstrated the challenges of sustaining buy-now-pay-later models in markets with volatile economies and borrowers with irregular income streams. The situation highlighted the importance of risk management, sustainable lending practices, and tailored credit scoring models suited to unique African consumer profiles.

9. Leadership and Market Lessons

Industry analysis suggests that leadership decisions, particularly regarding rapid expansion and spending, contributed to Lipa Later’s downfall. Criticism has been leveled at the acquisition of a struggling e-commerce platform amid cash flow constraints and aggressive scaling without adequate risk mitigation. Experts advocate for fintech startups to build sustainable business models, prioritize experienced leadership, and carefully plan growth trajectories in funding-dependent markets.

10. Future Prospects and Ideological Shift

The fate of Lipa Later rests on the administrator’s ability to restructure or find a suitable buyer capable of reviving the platform. More broadly, the BNPL segment in Africa is poised for evolution with an emphasis on innovation in credit assessment, use of AI, and stricter regulatory compliance. Lipa Later’s story encourages the fintech industry to rethink the BNPL approach in emerging economies and develop products with long-term financial sustainability and consumer protection at their core.

Conclusion

Lipa Later’s trajectory from a well-funded fintech pioneer to administration within a few years encapsulates the complexities of introducing digital credit and BNPL services in emerging markets. While the concept addressed crucial financing gaps for underserved consumers, challenges in funding, repayment, and strategic management underscored the fragility of such startups. As acquisition talks and restructuring plans unfold, Lipa Later remains a significant case study highlighting the balance between innovation, regulation, and financial discipline necessary for sustainable fintech growth in Africa. The question now is whether its lessons will inspire stronger, more resilient models that can truly transform consumer credit across the continent.