Lipa Later: A Cautionary Tale of Africa’s BNPL Tech Ecosystem as It Faces Administration

Just months ago, Lipa Later, a Kenyan buy-now-pay-later (BNPL) fintech, was celebrating a significant $10 million debt and equity injection, aimed at supporting its ambitious expansion plans across Africa. Today, the digital consumer credit provider is under the control of an administrator, marking a sharp and rapid decline that underscores the volatile nature of Africa’s emerging tech sector. On March 24, 2025, Joy Vipinchandra Bhatt of Moore JVB Consulting took charge of Lipa Later’s business, assets, and management, officially placing the company into administration under Kenya’s Insolvency Act of 2015.

Founded in 2018, Lipa Later quickly found its place in the market by offering hire purchase services, enabling consumers to purchase goods from retailers and pay in installments, with Lipa Later covering the upfront cost. This global model found success in Kenya, providing a way for people to access both essential and aspirational products in a market with varying levels of formal financial inclusion. The company attracted significant investor trust, securing $12 million in seed funding in early 2022, building on earlier investments from renowned startup accelerators.

However, Lipa Later’s growth trajectory began to falter in 2024. The $10 million funding round at the end of 2024, initially seen as a potential lifeline, proved insufficient to alleviate the growing financial pressures. Reports emerged of employees facing months of unpaid salaries, leaving them in a state of uncertainty. Suppliers, too, were left pursuing overdue payments, with at least one public legal dispute revealing the company’s precarious financial position.

The case of Africa Foresight Group (AFG), a London-based consultancy, provides a telling example of Lipa Later’s financial woes. In April 2022, AFG was contracted to produce a market report but sued Lipa Later for an unpaid fee of $13,516. Court records showed that Lipa Later withheld payment, citing poor-quality work. Yet, in a decisive ruling in December 2024, the Kenyan High Court sided with AFG, acknowledging that Lipa Later had admitted to the debt in internal communications. Justice Mong’are stated that Lipa Later was “estopped from claiming” that the debt was disputed. This legal loss not only increased the company’s financial burden but also highlighted its struggles in managing financial commitments.

Further complicating Lipa Later’s downfall was the emergence of allegations of trade secrets theft. Court documents from a separate case in March 2024, before the administration, revealed that Lipa Later accused a former Head of Partner Success Manager of violating their employment contract by joining competitor Craft Silicon Kenya and potentially using Lipa Later’s confidential information. The executive, who resigned in July 2023 and took up a role at Craft Silicon as Head of Product, was allegedly involved in launching a competing BNPL product soon after.

Lipa Later sought an injunction to stop the former employee from working for Craft Silicon and revealing confidential information. While the court ultimately dismissed the request for a temporary injunction, citing insufficient evidence of direct involvement in product development or the disclosure of trade secrets, the case illustrates the fierce competition within the fintech sector and the lengths companies go to in order to protect intellectual property. Though it remains unproven whether trade secrets were stolen, the allegations underscore the high stakes involved for startups navigating rapid growth and talent shifts.

The purchase of the struggling e-commerce platform Sky.Garden in December 2023, for a reported KES 250 million ($1.9 million), also raised concerns about Lipa Later’s financial judgment. At a time when the company was already under financial strain, the reasoning behind acquiring an obviously distressed entity remains unclear and may have further stretched its limited resources.

The appointment of an administrator marks a pivotal moment for Lipa Later. Bhatt’s immediate focus is to engage with stakeholders, including creditors, who have until April 23, 2025, to submit their claims. The administrator will evaluate the company’s financial health, explore potential recovery options, such as restructuring, selling the business, or potentially liquidating it. The company’s directors have been removed from control of its assets, signaling the gravity of the situation.

Lipa Later’s collapse offers a cautionary tale for Africa’s tech startup ecosystem. While the BNPL model holds significant potential in markets with large unbanked populations, it is not immune to economic downturns, funding shortages, and fierce competition. The company’s inability to secure additional funding after its 2023 debt round proved fatal, leaving it unable to meet its financial obligations.

The coming weeks and months will be critical in determining Lipa Later’s future. The administrator faces the complex task of navigating a web of debts, legal issues, and serious allegations. For the broader Kenyan and African tech ecosystems, Lipa Later’s downfall serves 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. Lipa Later’s story is not just about a failed startup; it 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.

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