Lipa Later’s Post-Administration Bid: Co-founder Sought $5M Weeks After Losing Control
The Kenyan buy-now-pay-later (BNPL) landscape faced a surprising development when Lipa Later, a prominent fintech startup, reportedly attempted to secure significant funding just weeks after entering administration. In a remarkable move, co-founder Eric Muli sought a $5 million lifeline from a UK lender to salvage the struggling business, even as operational control had already shifted to a court-appointed administrator. This extraordinary attempt highlights the desperate measures taken to rescue a once-promising African tech venture.
The Pursuit of a $5 Million Lifeline Amidst Administration
Details from a term sheet reviewed by TechCabal reveal that Lipa Later, through its co-founder, pursued a $5 million debt facility from UK-based Advanced Global Capital (AGC) in April. This proposed funding was intended to bolster its invoice factoring operations. The terms outlined a 36-month loan agreement, featuring a substantial annual interest rate of 14% on drawn funds. The initial 24 months were structured as interest-only payments, with quarterly repayments on the principal scheduled to commence from the 27th month. Critically, this fundraising endeavor occurred well after Lipa Later’s board had officially ceded management and asset control to Joy Vipinchandra Bhatt of Moore JVB Consulting LLP. Bhatt had been formally appointed as the administrator on March 24, following a period plagued by mounting financial distress, including overdue salaries, outstanding supplier payments, and a series of unsuccessful prior fundraising attempts. The fundamental question remains whether the administrator was aware of or sanctioned this independent fundraising initiative by the co-founder, adding another layer of complexity to the startup’s tumultuous situation.
Lipa Later’s current predicament underscores the challenges faced by some players in the rapidly evolving African fintech sector. The attempt to secure substantial capital post-administration, coupled with the high-interest terms, reflects the dire state of the company and the lengths to which its leadership was willing to go. The outcome of this particular fundraising effort, and its potential implications for the administration process and the company’s future, remain uncertain as the saga continues to unfold.
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