South African fintech group Capital Appreciation has expanded its portfolio of innovative technology companies through the R48.68-million acquisition of digital solutions group Responsive Technology group.

The acquisition includes three South African companies, namely 100% of Responsive Tech and Responsive Digital and 71% of Rethink Digital Solutions.

“Responsive fits well with Capital Appreciation’s investment philosophy of investing in established, asset-light growth companies that deliver innovative and disruptive fintech solutions to mainly institutional clients. We also look forward to exploring the potential for synergistic opportunities with existing operating units,” said Capital Appreciation joint CEO Bradley Sacks.

The Responsive Group will form part of Capital Appreciation’s software division and report to Synthesis.

Responsive, which designs and develops digital applications with clients across South Africa, the US, Europe and the UK, has a 10-year track record of delivering complex digital transformation projects, Web and mobile apps, as well as technology products for leading South African and international blue-chip clients, including Brambles, Capitec, Coronation, Experian, MoneyGram, Nedbank and Old Mutual.

As part of the transaction, Capital Appreciation will subscribe for 20% of the issued shares in Regal Digital, a related-party technology company located in the Netherlands, for a cash investment of R8.5-million.

Regal Digital is the operating company of Firelava, a consulting services business focusing on Web 3.0 technologies, non-fungible token and Blockchain solutions, Google Firebase and cloud specialist services, as well as solution architecture consultation.

It also has an 80% shareholding in Flamelink, a software-as-a-service solution offering a headless Content Management System (CMS) for Google's Firebase and is currently the de facto Firebase CMS with the most feature-rich offering on the market.

“We are excited to join a group that has such a strong culture of innovation, an extensive client base and a healthy balance sheet from which to expand,” said Responsive founders and directors Andrew McElroy, Marsh Middleton and Brandon Fairweather.

“We look forward to adding our unique strength to the group to create the best experiences for existing and new clients. We also see synergies in creating Web and mobile products that delight users by following a design thinking approach and expertly implementing the best technology solutions.”