One of Kenya’s most celebrated fintech startups is now a cautionary tale, and its founder is finally talking about what went wrong. Lipa Later, the buy-now-pay-later company that once issued around $100 million in credit to nearly a million customers across East and West Africa, was placed under administration in March 2025, and the full story of its collapse is only now coming into sharper focus.
The company was placed under administration in March 2025, with Joy Vipinchandra Bhatt of Moore JVB Consulting appointed to oversee its restructuring. Since then, there have been attempts to rescue what remains, including interest from Canada’s Engage Capital, which reportedly tabled a $24.5 million offer, and London-based Advance Global Capital, which proposed a $5 million loan facility.
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To understand how dramatic the fall was, it helps to first understand how high Lipa Later had climbed. Founded in 2017 when its founder Eric Muli was just 23 years old, the startup grew into one of the region’s leading buy-now-pay-later players. At its peak, it had issued around $100 million in credit, served close to a million customers, employed more than 200 staff, and built a network of roughly 1,000 agents across Kenya, Rwanda, Uganda and Nigeria. By May 2024, the Financial Times had ranked it among Africa’s fastest-growing companies, placing it alongside industry names like M-KOPA. Everything, at least on the surface, pointed upward.
Lipa Later’s model was simple but capital-heavy: customers paid a deposit, took goods like phones or appliances, and repaid in instalments, while the company paid merchants upfront and bore the credit risk. Backed by multiple funding rounds from US venture capitalists, it expanded aggressively, including acquiring Sky.Garden in 2021 and reaching a valuation near $100 million. The model worked in good times, but it carried a structural vulnerability that would prove fatal once market conditions shifted.
In a May 2026 interview, founder Eric Muli broke his silence and laid out a mix of COVID-era repayment failures, investor pressure, currency shocks and early-stage missteps that ultimately sank the company. The picture he painted was of a business that had been quietly unravelling for years, long before the administration notice made it public.
The cracks began during COVID-19 when repayment rates collapsed, with expected inflows dropping from millions of shillings to near zero. At the same time, Lipa Later borrowed in US dollars but earned in Kenyan shillings, so the weakening of the shilling from about KSh 100 to KSh 170 per dollar sharply increased its debt burden. That currency mismatch alone would have been damaging enough, but it was compounded by deteriorating portfolio quality. Customers were taking devices, reselling them, and walking away from their repayment obligations. Defaults climbed while investor pressure to grow faster pushed the company to keep expanding even as the financial foundation cracked.
The company’s troubles came out into the open through a series of legal and operational failures. Employees went months without pay, suppliers were chasing unpaid invoices, and at least one legal battle over outstanding debts made the situation public. One of those cases involved London-based consultancy Africa Foresight Group, which had been hired in 2022 to prepare a market report. Lipa Later withheld payment, claiming the work was subpar, but Kenya’s High Court ruled against them in December 2024, with the judge noting that internal company emails showed the debt had already been acknowledged. The court found no genuine dispute and ruled accordingly, adding fresh legal pressure to an already fragile balance sheet.
There was also a talent drama that pointed to deeper internal tensions. Court documents from March 2024 revealed that Lipa Later had accused a former employee of leaving to join competitor Craft Silicon Kenya and potentially taking confidential information. The employee had departed in July 2023 and was involved in launching a competing BNPL product at the new employer. Lipa Later sought to block the individual from working at Craft Silicon, but the court dismissed the case for lack of solid evidence.
The acquisition of Sky.Garden, which Lipa Later took over in December 2023, also drew criticism. The decision to absorb the struggling eCommerce platform raised questions about why the company was taking on another distressed business at a time when its own resources were already stretched thin. Looking back, the move appears to have accelerated the deterioration rather than offered any strategic advantage.
Lipa Later’s collapse highlights the fragility of Africa’s BNPL boom, which depends on continuous external funding. The model works in easy liquidity but breaks down when capital tightens. Rising interest rates, weaker economic conditions, and reduced investor appetite exposed these risks. Other Kenyan startups like Copia, Bonto, and Antara Health have also faced shutdowns or administration, signalling a broader correction in venture-backed models in the region.
The administration process left creditors waiting. The administrator’s immediate focus was to engage with all key stakeholders, including creditors, who were given until April 23, 2025, to submit their claims. The administrator was tasked with evaluating the company’s financial health and exploring potential recovery options, ranging from restructuring to selling the business or liquidating it entirely.
As for Muli himself, he has already moved on. After the collapse, he founded MRE Real Estate Limited in 2025, a property firm focused on retail and commercial projects reportedly worth around KSh 5 billion, with some former Lipa Later investors backing it. His pivot reflects a broader lesson: asset-backed businesses are easier to finance locally than high-risk BNPL lending. Whether that lesson lands with the wider African startup ecosystem is another question entirely.
Lipa Later’s story is not simply about one company that ran out of money. It is about the structural fragility of credit-led startups operating in volatile markets, dependent on foreign capital, exposed to currency risk, and under constant pressure to scale at a pace their underlying economics could not sustain. The startup attracted real investor confidence, reached genuine scale, and still collapsed. That is the part of the story that Africa’s fintech community will need to sit with for a long time.
