Engage Capital, a venture capital firm focused on Kenya, has tabled a $24.5 million offer to acquire Lipa Later, the once-promising buy-now-pay-later (BNPL) platform that collapsed into administration earlier this year. The proposed deal, confirmed by multiple sources and detailed in a letter of intent reviewed by TechCabal, signals one of the most significant attempts to revive a high-profile African fintech that faltered under funding pressures. If completed, it could set a precedent for distressed startup turnarounds in East Africa’s challenging venture landscape.
Deal Structure and Intentions
The offer was formally submitted in mid-May 2025, outlining Engage Capital’s plans to acquire Lipa Later’s technology platform, operating licences, customer base, and intellectual property. According to the LOI, the venture firm would assume several of the company’s liabilities while explicitly excluding bad loans accumulated before the administration process began. This approach reflects Engage Capital’s intention to retain the operational core of the business while cleaning up the most problematic parts of its balance sheet.
The Rise and Fall of Lipa Later
Founded in 2018 by Eric Muli and Michael Maina, Lipa Later rapidly gained attention as one of East Africa’s most promising fintechs, securing over $16 million across ten funding rounds from investors such as Cauris, Lateral Frontiers, Orbit Startups, and Founders Factory Africa. The company built its model on enabling consumers to purchase electronics and other products on instalment while paying merchants upfront, a proposition that resonated in credit-starved markets. However, in 2024, the firm struggled to raise new capital, fell behind on payroll obligations, and amassed significant debts, culminating in its March 2025 entry into administration.
Negotiations Amid Crisis
While Lipa Later’s operational troubles deepened, Engage Capital began preliminary takeover discussions even before administrators were formally appointed. Once Moore JVB Consulting took over as the court-appointed administrator, engagement with potential buyers accelerated, with Engage emerging as the frontrunner willing to absorb the bulk of assets and some liabilities. Former company executives noted that by the time administration proceedings began, the path toward acquisition was already underway, driven by a belief that BNPL in Africa could still thrive if executed with tighter discipline.
Prospects for a Rare Turnaround
In Kenya, startups entering administration typically face prolonged court battles, frozen assets, and a loss of investor confidence, often ending in liquidation or obscurity. A successful acquisition of Lipa Later would mark one of the few instances in the local ecosystem where a distressed fintech manages to salvage its platform and brand. For Engage Capital, the transaction is not only a bet on technology but also a wager that access to credit remains a critical market gap across the continent that can be profitably addressed.
Stakeholder Reactions and Next Steps
Lipa Later co-founder Eric Muli confirmed to TechCabal that talks are ongoing but declined to share additional details, citing the sensitivities of the legal process. Investors and industry observers have expressed cautious optimism that Engage’s intervention could restore some value to creditors, suppliers, and employees who were left in limbo after the collapse. The due diligence process is expected to continue over the coming weeks, with a final decision contingent on regulatory approvals and court clearance.
If Engage Capital completes the acquisition, it could revive a brand that was once synonymous with innovation in East African retail finance. The move may also encourage other investors to consider restructuring distressed startups rather than writing them off entirely, signaling a maturing ecosystem willing to support second acts. Whether Lipa Later becomes a rare comeback story or another cautionary tale will depend on Engage’s ability to rebuild trust, streamline operations, and reintroduce BNPL services without repeating past missteps.
Source: Techcabal