Tech credit start-up Lipa Later placed under administration

Tech credit venture Lipa Later has been put under administration amid undisclosed woes in one of Kenya’s most funded start-ups.

The buy-now-pay-later (BNPL) platform, founded in 2018 by Eric Muli (CEO) and Michael Maina (COO), partners with retailers to allow shoppers to pay in instalments.

Joy Vipinchandra Bhatt of Moore JVB has been appointed the company’s administrator effective March 24, per a notice published by the consulting firm.

Administration is a process where an independent person takes control of a company, investigates its finances and recommends a way forward. This could be winding up the company, selling or restructuring it.

“By virtue of the administration, the powers of the directors of the company in terms of dealing and/or transacting with the company's assets have ceased, unless with the express permission of the administrator,” read the notice.

“Moving forward, all matters, operational or otherwise, pertaining to the affairs of the company shall be directed to the administrator or their authorised representatives.”

Bhatt further directed all Lipa Later creditors to submit full particulars of any claims against the start-up by April 23.

Lipa Later has, to date, expanded to Uganda and Rwanda.

The company raised $12 million in a debt-equity pre-Series A funding round at the start of 2022 (about Ksh.1.55 billion at current exchange rates) to expand to more African markets.

Later in the year, it acquired the troubled e-commerce platform Sky Garden, on the brink of closure following insolvency, for an undisclosed amount.

Come 2023, the company closed a Ksh.500 million debt issue.

It additionally announced it had secured approval to raise funds from the general public in the United States, becoming one of the first African companies to get the green light from the U.S. Securities and Exchange Commission (SEC).

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