Lipa Later, a prominent Kenyan buy-now-pay-later (BNPL) fintech company, has officially entered administration as of March 24, 2025, following a protracted period of financial difficulties and unsuccessful attempts to secure additional funding. Joy Vipinchandra Bhatt from Moore JVB Consulting LLP has been appointed as the administrator to oversee the company’s affairs during this challenging phase.
This latest development marks the culmination of a tumultuous year for Lipa Later, which has faced significant challenges in attracting new investment since its last capital raise—a $3.4 million debt financing round completed in September 2023. The inability to secure fresh funding has severely impacted the company’s liquidity, leading to delays in salary payments to employees and outstanding debts to suppliers.
Entering administration signifies a critical shift in control, as the company’s directors have relinquished authority over its assets and operations. The decision-making power now lies with the appointed administrator, who will navigate the complexities of the company’s financial situation. Creditors have been given until April 23 to submit their claims, as the future of Lipa Later hangs in a precarious balance.
In a statement regarding the administration process, Bhatt emphasized the importance of collaboration among stakeholders, stating, “We are currently engaging all key stakeholders of the company to elicit their cooperation in order to achieve the best possible outcome for the company.”
Reports indicate that at least five employees have not received their salaries for several months, with some claiming that their financial struggles have intensified as of December 2024. Lipa Later is also facing legal challenges from various suppliers, including the London-based consultancy Africa Foresight Group (AFG). AFG filed a lawsuit against Lipa Later in 2024 for an unpaid consultancy fee of $13,516, which has further complicated the company’s financial woes.
The dispute with AFG originated from a contract signed in April 2022, where the consultancy was tasked with preparing a market report. Tensions escalated when Lipa Later withheld payment, alleging that the work delivered was subpar. However, in a December 2024 ruling, Kenya’s High Court dismissed Lipa Later’s defense, highlighting that the company had acknowledged the debt in internal communications.
Justice Mong’are stated, “It is therefore clear to me that the amount demanded in the statutory demand is, in fact, not disputed, and the debtor (Lipa Later) is estopped from claiming so having admitted to the debt.” The court also noted that Lipa Later failed to demonstrate a genuine and substantial dispute regarding the debt.
Lipa Later was once regarded as a rising star in the fintech sector, having garnered substantial investor confidence in its early stages. The company raised $12 million in seed funding in January 2022 from notable investors such as Cauris and Lateral Frontiers, alongside undisclosed debt financing from the same sources. Previous funding rounds included seed investments from Orbit Startups in 2021 and Founders Factory Africa in 2019.
Despite this initial momentum, Lipa Later struggled to secure additional funding in 2024. An anonymous top executive revealed that the company was on the verge of finalizing a significant deal in the fourth quarter of 2024, but the agreement ultimately fell through, exacerbating the company’s financial challenges.
The situation worsened in December 2023 when Lipa Later acquired the struggling e-commerce platform Sky.Garden for KES 250 million (approximately $1.9 million). This acquisition raised eyebrows among investors and industry observers, as it came at a time when Lipa Later was already grappling with substantial financial obligations.
As Lipa Later navigates this critical juncture, its future hinges on the ability of the appointed administrator to restructure its operations effectively or to identify a potential buyer willing to invest in its BNPL model. The outcome of this administration process will determine whether Lipa Later can recover from its current predicament or if it will face further decline in the competitive fintech landscape.
