Two weeks after entering administration in March 2024, Kenyan buy-now-pay-later startup Lipa attempted to raise $5 million to salvage its operations—despite having already ceded control to a court-appointed administrator.
According to a term sheet seen by , co-founder Eric Muli sought a $5 million, 36-month loan from UK-based Advanced Global Capital (AGC) in April to support the company’s invoice factoring business. The proposed deal came with a steep 14% annual interest rate—interest-only for the first 24 months, with repayments starting in year three.
By the time the loan was requested, the company was no longer under Muli’s control. In late March, the board handed over Lipa ’s assets and operations to Joy Vipinchandra Bhatt of Moore JVB Consulting LLP after months of unpaid salaries, defaulted supplier payments, and failed fundraising efforts. It remains unclear whether the administrator was aware of or authorised the financing attempt. Under Kenyan insolvency law, directors lose management powers once administration begins.
Lipa was once a rising star. Founded in 2018, it raised $16.6 million from backers including Cauris, al Frontiers, Orbit Startups, and Founders Factory Africa. But signs of distress became evident by late 2023, when it acquired struggling e-commerce platform Sky.Garden for $1.9 million—despite already defaulting on obligations.
By March 2024, the company was out of cash, staff were unpaid, and creditors loomed. The $5 million loan bid was a last-ditch effort to stay afloat—but one made outside its legal authority.
