Watu Holdings, a Kenyan buy-now-pay-later (BNPL) startup, reported a steep 84% decline in profit to $1.2 million (KES 157 million) for the year 2024, according to filings by Car & General, which owns a 29% stake in the company. The drop from $7.6 million (KES 985 million) in 2023 highlights increasing loan defaults and weakening repayment patterns across Watu’s key markets:

  • Kenya

  • Uganda, and

  • Sierra Leone.

The company’s lending model targets informal transport operators and low-income earners – especially boda boda riders – who typically lack access to traditional credit. While this approach has fueled rapid growth, it has also exposed Watu to income volatility, currency risk, and rising competition from players like M-KOPA, Aspira, and AmperSand.

Watu operates five major product verticals, with its:

  • flagship motorcycle financing arm, Watu Boda,

at the core. Other offerings include:

  • mobile phone loans through Watu Simu

  • vehicle financing via Watu Gari

  • education loans under Watu Shule, and a newer entry into

  • electric vehicle financing to tap into the emerging clean transport market.

However, performance varied by region.

In Tanzania, where operations are run through Watu Tuu Limited, profits nearly doubled to $5 million (KES 650 million), marking a 93% year-on-year increase. While Watu didn’t provide market-level financial breakdowns, the Tanzania results point to a more favourable lending environment there.

Watu is part of a growing wave of non-bank lenders expanding asset-backed microcredit across East Africa. But rising interest rates and increasing repayment strain are beginning to test the sustainability of this model – particularly in Kenya, where informal incomes remain under economic pressure.

Car & General, a Nairobi Securities Exchange-listed firm that assembles and distributes motorcycles in the region, benefits significantly from Watu’s financing demand. Watu’s financial results are increasingly featured in the company’s earnings disclosures. As a privately held company, Watu does not release standalone financial statements.

Founded in 2015 by Latvian entrepreneur, Andris Kaneps, Watu has raised over $20 million across five funding rounds from investors including:

  • FMO

  • Gateway Partners

  • Verdant Capital, and

  • AHL Venture Partners.

Its most recent raise was a Series B round in February 2024. Watu remains one of the few consistently profitable tech startups in Kenya.

In March 2025, BitKE reported that Kenyan buy-now-pay-later (BNPL) startup, Lipa Later, had been placed under administration after failing to secure the necessary funding to sustain its operations. This development highlights the challenges faced by fintech companies in the region, particularly in the BNPL sector, where access to capital is crucial for growth and sustainability.

FINTECH AFRICA | Prominent Kenyan Buy Now Pay Later (BNPL) Fintech Startup, Lipa Later, to Shut Down After Failing to Raise Funding

The startup’s predicament reflects a broader trend of startup challenges in Kenya, where several promising ventures have faced similar fates… pic.twitter.com/lFH9NnEz1E

— BitKE (@BitcoinKE) March 29, 2025

The article provided a concise overview of the situation, noting the company’s efforts to raise funds and the implications of its failure to do so.

While the article offered a brief account of Lipa Later’s financial struggles, the piece serves as a timely update on a significant development in the Kenyan fintech sector.

 

 

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