What brought Lipa Later down? Founder opens up on the fall and his next venture

Eric Muli, founder of Lipa Later, launched the buy-now-pay-later service in 2017 after realizing banks were unwilling to offer loans to young customers like himself. The platform allowed users to pay a deposit for essential items, such as phones, and settle the balance over time, digitizing the traditional hire-purchase model. By its peak, Lipa Later had issued $100 million (Sh12.9 billion) in credit, served nearly 1 million customers, and operated in Kenya, Rwanda, Uganda, and Nigeria, with over 200 permanent staff and 1,000 agents. The business partnered with retailers like Hotpoint to facilitate quick purchases, paying shops upfront while collecting payments from customers in instalments. Muli described the model as a modernized version of hire purchase, eliminating the need for physical stock while boosting retailers’ revenue by up to 30 percent monthly. Venture capital funding supported rapid expansion, including the 2021 acquisition of SkyGarden, an e-commerce platform, to broaden customer reach. Despite early success, Lipa Later faced an unexpected downfall, joining a list of Kenyan startups that collapsed after initial promise. Muli attributed the challenges to shifting market dynamics and operational pressures, though he did not specify exact causes. The company had previously raised over 10 rounds of funding from U.S. investors and adapted during the COVID-19 pandemic by further digitizing operations. Muli, now 34, studied entrepreneurship at Strathmore Business School in Kenya and later at Babson College and Stanford University in the U.S. He emphasized that the U.S. experience taught him resilience, encouraging him to secure resources and execute ideas despite early obstacles. Though Lipa Later’s collapse was abrupt, Muli hinted at plans for a new venture, signaling his determination to continue innovating in Kenya’s fintech sector.