Financial Troubles of Lipa Later: Insights into the Struggles of Africa's Buy Now Pay Later Technology Sector Facing Insolvency
Lipa Later, a Kenyan buy-now-pay-later (BNPL) fintech company, has entered administration following financial struggles and failed fundraising attempts. The company, which was founded in 2018 and provided hire purchase services, has been under the control of a court-appointed administrator, Joy Vipinchandra Bhatt of Moore JVB Consulting LLP, since March 24, 2025.
Financial Struggles and Failed Fundraising
The company experienced significant financial difficulties, including months of unpaid salaries and missed supplier payments, which hampered its operations and stability. Prior to entering administration, Lipa Later encountered difficulties in securing additional funding, which exacerbated its financial woes.
The Collapse and Its Implications
The collapse of Lipa Later serves as a cautionary tale for Africa's tech startup ecosystem. The purchase of the struggling e-commerce platform Sky.Garden in December 2023 raised concerns about Lipa Later's financial judgment. The company's downfall also highlights the risky and rewarding nature of innovation in emerging markets, where rapid growth and potential trade secrets theft can quickly lead to a swift collapse.
The Administrator's Role
The administrator, Bhatt, faces the complex task of navigating a web of debts, legal issues, and serious allegations. She will evaluate the company's financial health, explore potential recovery options such as restructuring, selling the business, or potentially liquidating it. Bhatt will engage with stakeholders, including creditors, who have until April 23, 2025, to submit their claims.
The BNPL Model and Its Challenges
The BNPL model, while holding significant potential in markets with large unbanked populations, is not immune to economic downturns, funding shortages, and fierce competition. The broader Kenyan and African tech ecosystems are affected by Lipa Later's downfall, serving as a stark reminder that even well-funded companies with promising business models are vulnerable to financial pressures, intense competition, and the necessity for sound financial management.
[1] Source: Various news reports [2] Source: TechCrunch, "The state of Africa's fintech industry in 2022: Opportunities, challenges, and the road ahead," published on January 20, 2022
The BNPL model's financial pressures and competitive landscape in emerging markets are underscored by Lipa Later's downfall, emphasizing the importance of solid financial management for startup businesses seeking financial inclusion through venture capital and technology. Bhatt's role as the administrator involves assessing Lipa Later's financial health, exploring restructuring options, and engaging with stakeholders to recover the company and resolve any legal issues. The collapse of Lipa Later serves as a warning to the startup ecosystem in Africa, particularly with regards to prudent financial decision-making, especially when venturing into risky and innovative industries.
