From Lipa Later to Ruins: How Eric Muli's Buy-Now-Pay-Later Startup Failed and What He Learned

Having studied entrepreneurship at Strathmore Business School in Kenya - and then some time later at Babson and Stanford in the US - Eric Muli was bursting with all sorts of entrepreneurial ideas.

One day, he just wandered into a phone shop in Nairobi and asked the guy behind the counter if he could buy a phone on instalments. But the attendant just shook his head and said you could only get instalments through a bank. And that's when it hit him - wouldn't it be great if people could buy essential things without all the hassle of banking?

Birth of Lipa Later

So in 2017 Muli founded Lipa Later - which was the first of its kind in Kenya, offering a buy-now-pay-later service in a space that was basically untapped at the time. The idea was dead simple - customers forked out a deposit, took the item off the shelf right away, and then paid the balance off in instalments - basically a digital version of the old hire purchase model.

At the height of its success, Lipa Later was doling out around $100 million in credit, employed over 200 full-timers, worked with almost 1,000 agents, and had something like a million customers ringing up - all of whom were using their service across Kenya, Rwanda, Uganda and Nigeria.

Rapid Expansion and all that jazz

The company had more than a few rounds of funding from venture capital firms - which really helped get the ball rolling - and partnered with retailers like Hotpoint to get people buying things they actually needed. The difference though was they didnt hold any inventory, instead they'd pay the retailers upfront for their items - only then to get cash back from customers gradually - which in turn meant that the retailers were raking it in - up to an extra 30% a month on top of what they were already making.

In 2021 Lipa Later even went and snapped up SkyGarden, an e-commerce platform - in an effort to reach more customers and expand its online sales even further.

The Crash

But by 2024 the music had stopped playing, and the company was struggling to get any more funding coming in - and then in March 2025 things got even worse when it was declared insolvent.

So why did Lipa Later go under?

So Muli had a think about what went wrong, and his top 5 causes of the breakdown were:

• Capital-Intensive Model: The business needed loads of capital upfront because they'd pay the retailers the full amount for the item - only to wait months or sometimes even years for customers to come good on their payments
• Covid-19 impact: The pandemic came along and all of a sudden repayments dried up. People just werent paying as much back as they used to - Muli remembers that he'd lend out 1 million shillings but get back only 100,000.
• Currency Risk: When investors needed to be paid in dollars - and the Kenyan shilling started to drop in value - the company found itself losing out big time - basically when they borrowed at a rate of 100 to the dollar and then had to repay at 170 to the dollar - that's a 70% loss.
• Investor Misalignment: The venture capitalists just didnt get Lipa Later. They were pushing the company to make decisions that were going to be bad for them in the long run. "You can't have it both ways" Muli says - trying to make profits quarter by quarter while also not chasing the same profits long-term.
• Borrower fraud: And finally, it turned out that there were some Kenyans who would pay for a product, buy it, then sell it for a discount - before refusing to pay off the loan. "We thought we had a credit reference system in place" Muli says, "but its clear we didnt".

The aftermath

Despite the whole thing crashing, Muli isnt carrying a massive chip on his shoulder, in fact he's saying that Kenyan culture is often tough on failed entrepreneurs - and "crucifies" them. So in 2025 he started up a new company - MRE Real Estate Limited - this time focusing on developing commercial property - and it seems that a few of his old investors have been keen to join him on that project - as it has tangible assets and a decent long-term potential.

Muli also still has Alpha Force Security - which is going strong and employing over 200 people - and is another thing he's always cited as a success.