SkyGarden has had a few rough months and even had plans to shut down operations. The e-commerce platform was running out of cash and could not keep operating unless it got a cash injection. The company was burning a lot of cash but was just not profitable yet as is the case with more other e-commerce sites.
Just last year, $4 million in series A funding but by October this year, the company was running out of money. With e-commerce requiring huge investments in marketing to attract buyers, the platform spent a significant chunk of the funding to do just that. It seems that this was not enough to keep it afloat as the low margins could not sustain its operation.
As the company announced that it was planning to shut down operations in Kenya, executives were still looking for investors looking to save it from going under. The company got a new investor a few weeks back but did not reveal the details probably because the deal was not finalized. It looks like the deal is now finalized and the new investor is Lipa Later.
Lipa Later is the Buy Now, Pay Later platform by Odyssey Capital. Lipa later was one of the first search platforms in the country and has seen massive growth in Kenya. It lets individuals buy items and pay later in installments. Lipa Later has been in operations in Kenya for a while and charges 4.2% interest rate for those who use its services. Payments can be made in 3, 6, 9, or 12 months.
The two companies will be making the official announcement on Monday (5th December) and this is where they are expected to explain how this deal came about. It is a strange one and I honestly did not expect Lipa Later to be the company saving SkyGarden. I will also be keen to know how much capital Lipa Later is injecting into SkyGarden and how soon they are expecting to recover their money. Keep in mind that SkyGarden has been in rough waters before and I would like to understand why Lipa Later is hopeful that they can turn the company around.
Lipa Later is currently well funded as the firm raised $12 million from investors earlier this year. It is not clear if some of this cash is being used to keep SkyGarden alive.
Read: Telkom’s New Partnership With Lipa Later Set to ease access to smartphones
