Engage Capital tables Ksh.3B bid for troubled tech credit start-up Lipa Later

Troubled tech credit venture Lipa Later has received several offers of acquisition, according to people familiar with the matter.

Sources confirm to Citizen Digital that discussions with at least five interested parties have taken place over the past three months, with the venture capital firm Engage Capital making a $24.5 million (Ksh.3.18 billion) offer for the start-up, which went into administration in March amid undisclosed financial woes.

“Total Consideration: $24,500,000. Proposed Structure: Acquisition of Target’s fintech platform, customer base, intellectual property, license acquisition, clearance of company liabilities, loan book, and associated operations,” reads Engage Capital’s letter of intent seen by Citizen Digital.

The London-based Advance Global Capital has also offered a $5 million (Ksh.650 million) loan term facility for the embattled buy-now-pay-later (BNPL) start-up.

Lipa Later, founded in 2018 by Eric Muli (CEO) and Michael Maina (COO), partners with retailers to allow shoppers to pay in instalments.

Joy Bhatt of Moore JVB was appointed the company’s administrator effective March 24, and he directed all creditors to submit any claims against the start-up by April 23.

The decision to proceed with an acquisition was approved in principle pending the conclusion of formalities with the administrator, one shareholder said, requesting anonymity over the ongoing court matter.

Muli confirmed that acquisition talks began before March, but could not provide further details.

Bhatt did not respond to a Citizen Digital request for comment.

Before the debt woes, Lipa Later had expanded across Kenya, Uganda, Rwanda, and Nigeria, buoyed by a $12 million (about Ksh.1.56 billion at current rates) debt-equity pre-Series A funding round at the start of 2022 and a Ksh.500 million debt issue in 2023.

The company made headlines in 2022 after acquiring the troubled e-commerce platform Sky Garden, on the brink of closure following insolvency, for an undisclosed amount.

Lipa Later’s backers comprise Cauris Finance, Lateral Frontiers VC, GreenHouse Capital, SOSV IV LLC, Sayani Investments, Axian Financial Services, and Uncovered Fund.