Bid by Engage Capital Tables worth $24.5 million aims to rescue Lipa Later from administration
Engage Capital Bids $24.5 Million to Rescue Kenyan Buy-Now-Pay-Later Startup Lipa Later
Lipa Later, the Kenyan buy-now-pay-later startup that entered administration in March 2025, is on the brink of a potential revival. Engage Capital, a Kenyan venture capital firm specializing in complex financial restructurings and cross-border transactions, has made a bid of $24.5 million to acquire Lipa Later's technology platform, customer base, intellectual property, operational licences, and performing loan book[1][2][4].
Founded in 2018 by Eric Muli and Michael Maina, Lipa Later had previously raised $16.6 million across 10 funding rounds, including a large $12 million seed round led by Cauris and Lateral Frontiers in January 2022. Earlier investments came from Orbit Startups in 2021 and Founders Factory Africa in 2019[1][2].
The proposed acquisition could be a rare example of a recovery for a Kenyan startup under administration, potentially challenging the usual outcome where insolvency leads to collapse due to legal disputes and debts[1][2]. Engage Capital plans to put 10% of the offer into escrow upon signing a definitive agreement[3].
Competing proposals include one from London-based Advance Global Capital offering a loan facility for regional expansion, but Engage Capital’s bid is considered the most advanced and comprehensive offer as it proposes a full acquisition rather than just financing[3][4].
If the deal with Engage Capital goes through, it could potentially rescue Lipa Later's previously celebrated business model, which facilitated installment purchases for customers while paying vendors upfront. However, the startup struggled in 2024 due to missed payroll obligations and growing unpaid debts to suppliers as a result of the funding shortage[1].
Eric Muli, co-founder of Lipa Later, confirmed that acquisition discussions are ongoing, but he is withholding additional information due to ongoing court proceedings. The proposed deal excludes non-performing loans[1][2].
A successful acquisition could have significant implications for the Kenyan startup market. It could set a precedent for rescuing distressed startups in Kenya, demonstrating that with proper venture capital support, startups can avoid liquidation even after administration. This could boost investor confidence in the Kenyan fintech space by showing that exits can be engineered even under financial distress. It may also encourage other VCs to explore rescue and turnaround opportunities rather than writing off failed startups[1][2].
| Aspect | Details | |--------------------------------|-------------------------------------------------------| | Bid amount | $24.5 million | | Bidder | Engage Capital (Kenyan VC specializing in restructurings) | | Acquisition scope | Technology, customer base, IP, licenses, performing loans | | Lipa Later founding year | 2018 | | Founders | Eric Muli, Michael Maina | | Previous investment raised | $16.6 million over 10 rounds | | Major previous investors | Cauris, Lateral Frontiers, Orbit Startups, Founders Factory Africa | | Status before bid | Entered administration March 2025 | | Competing bids | Advance Global Capital (loan facility) and others | | Market impact | Potentially a pioneering startup recovery in Kenya |
Engage Capital's move reflects a strategic interest in revitalizing fintech innovation in Kenya by rescuing a significant player within the buy-now-pay-later sector, looking to turn around a struggling startup with proven demand and regional presence[1][2][3][4].
[1] TechCrunch. (2025, May 10). Engage Capital bids $24.5 million to acquire Lipa Later. Retrieved from https://techcrunch.com/2025/05/10/engage-capital-bids-24-5-million-to-acquire-lipa-later/
[2] Business Daily Africa. (2025, May 10). Engage Capital bids $24.5 million to rescue Lipa Later. Retrieved from https://www.businessdailyafrica.com/news/engage-capital-bids-24-5-million-to-rescue-lipa-later/
[3] The Standard. (2025, May 11). Engage Capital's bid for Lipa Later: What it means for Kenya's startup market. Retrieved from https://www.standardmedia.co.ke/business/article/2001370199/engage-capitals-bid-for-lipa-later-what-it-means-for-kenyas-startup-market
[4] Nairobi Wire. (2025, May 12). Engage Capital's $24.5 million bid for Lipa Later: What you should know. Retrieved from https://www.nairobiwire.com/business/engage-capitals-24-5-million-bid-for-lipa-later-what-you-should-know/
Venture capital's role could be crucial in the rescue of Lipa Later, as Engage Capital, a Kenyan firm specializing in complex financial restructurings, has proposed a $24.5 million bid that encompasses Lipa Later's technology platform, customer base, intellectual property, operational licences, and performing loan book, demonstrating a strategic interest in revitalizing fintech innovation in Kenya. If successful, this acquisition could set a precedent for rescuing distressed startups in Kenya and boost investor confidence in the fintech space, potentializing future venture capital support.
