Kenyan buy now, pay later (BNPL) company LipaLater is turning to crowdfunding to raise $1.2 million at a valuation of $30 million. The decision comes just months after the company acquired Kenyan online marketplace SKY.Garden, which was on the verge of shutting down due to a failed funding round.
LipaLater is accepting investments as low as $100 on the crowdfunding platform Republic. So far, it has raised $27,228 from 29 investors. However, the company insists that the crowdfunding is not out of necessity. LipaLater has already raised $25 million through a mix of debt and equity, with recent significant debt investment. The public crowdfunding campaign is aimed at improving the company’s debt-to-equity ratio.
CEO Eric Muli explained, “We have adequate funding. This public crowdfund is to raise equity investments to improve our debt-to-equity ratio.” While the company acknowledges that VC interest in growth and late-stage companies has been declining, LipaLater believes its investors are optimistic about its trajectory. Muli highlighted the importance of conservative pricing in fundraisers, noting that many investors have been burned by investments in companies with inflated valuations.
LipaLater’s decision to crowdfund on Republic was based on recommendations from friends who had successfully raised funds on the platform. The company joins other East African startups, including Mpower and MarketForce, in exploring alternative fundraising paths such as crowdfunding. With VC deals shrinking, more startups may turn to crowdfunding to secure essential funding.
By embracing crowdfunding, LipaLater aims to not only attract new investors but also improve their debt-to-equity ratio. The company’s success in acquiring SKY.Garden and its profitability have positioned it as a promising player in the BNPL sector. As LipaLater’s campaign progresses, it will be interesting to see how the company leverages its momentum and investor optimism to meet its fundraising goals.