Bid by Engage Capital for Lipa Later's Resurrection Valued at $24.5 Million from Administratorship
Kenyan venture capital firm Engage Capital has submitted a $24.5 million bid to acquire Lipa Later, a buy-now-pay-later (BNPL) startup that went into administration in March 2025 after failing to raise additional funding.
If finalized, this deal would be a rare occurrence in the Kenyan startup ecosystem, representing a successful recovery of a company under administration, where insolvency usually leads to collapse amid legal and financial challenges.
The Proposed Acquisition Deal
The proposed acquisition deal includes purchasing Lipa Later’s technology platform, customer base, intellectual property, and operating licenses. It also involves assuming some company liabilities, excluding non-performing loans, and taking over the loan portfolio and related business functions.
Background on Lipa Later
Founded in 2018 by Eric Muli and Michael Maina, Lipa Later raised a total of $16.6 million across 10 funding rounds. Its largest funding round was a $12 million seed round in January 2022, led by investors Cauris Capital and Lateral Frontiers. Earlier pre-seed funding included Orbit Startups (2021) and Founders Factory Africa (2019).
Lipa Later had expanded regionally into Uganda and Rwanda and acquired e-commerce firm Sky.Garden in late 2022. At its height, Lipa Later was active in Kenya, Uganda, and Rwanda, with expansion plans targeting Nigeria and Ghana.
Other Bidders and Offers
Two other firms have submitted bids: an unnamed Nairobi-based consultancy has offered $19 million for the business, while Advance Global Capital (AGC) proposed a $5 million loan facility rather than acquisition, aimed at regional growth through Lipa Later’s receivables.
Potential Impact
A successful acquisition by Engage Capital could set a precedent for startup recoveries in Kenya, challenging the typical outcome of insolvency. It might stabilize Lipa Later’s operations and allow a revival of the BNPL service addressing growing consumer credit needs in East Africa. The deal would consolidate important fintech assets, increasing Engage Capital’s influence in the local fintech ecosystem.
Reasons Behind Lipa Later’s Financial Distress
Difficulties raising capital amid economic headwinds in Kenya and factors such as annual tax and import regulation changes, a weakening Kenyan shilling, and challenging economic conditions may have contributed to Lipa Later’s financial struggles.
In mid-May, Engage Capital submitted a letter of intent (LOI) to Lipa Later, outlining plans to acquire the company's technology infrastructure, customer network, intellectual property, and regulatory licenses. Eric Muli, co-founder of Lipa Later, confirmed that acquisition discussions are underway but did not disclose additional information due to ongoing court proceedings.
If the deal with Engage Capital goes through, it could potentially rescue the remnants of Lipa Later's celebrated model. The outcome of this acquisition process could have notable implications for the Kenyan startup ecosystem’s approach to insolvency and recovery.
- The proposed acquisition deal between Engage Capital and Lipa Later, if finalized, would be significant in the Kenyan startup ecosystem, representing an uncommon recovery of a company under administration and potentially setting a precedent for startup recoveries.
- The acquisition deal of Lipa Later by Engage Capital, involving the purchase of its technology platform, customer base, intellectual property, and operating licenses, could have a substantial impact on the fintech sector in East Africa, consolidating important fintech assets, and potentially stabilizing Lipa Later's operations for a revival of the buy-now-pay-later (BNPL) service.
