South African fintech group, Capital Appreciation Limited has acquired the Responsive Technology group for the purchase price of R48,68 million. The acquisition includes 100% of both Responsive Tech Proprietary Limited and Responsive Digital Proprietary Limited, and 71% of Rethink Digital Solutions Proprietary Limited.
Responsive is a digital solutions group that designs and develops digital applications with clients across South Africa, the USA, Europe and the United Kingdom. The group has a proven, 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. These companies have included Brambles Limited (CHEP), Capitec, Coronation, Experian, MoneyGram, Nedbank and Old Mutual.
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2021 saw fintech dominate the fundraising of tech startups in Africa, accounting for two thirds (nearly $3 billion) of all the investment raised by startups across the continent.
As part of the transaction, Capital Appreciation will subscribe for 20% of the issued shares in Regal Digital B.V., a related party technology company located in the Netherlands, for a cash investment of €500,000 (R8,5 million). Regal Digital is the operating company of Firelava, a consulting services business focusing on Web 3.0 technologies, non-fungible token (NFT) and Blockchain solutions, Google Firebase and cloud specialist services as well as solution architecture consultation. Regal Digital has an 80% shareholding in Flamelink B.V., a ‘software-as-a-service’ (SaaS) 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 in the market.
Capital Appreciation Joint CEO, Bradley Sacks, noted that: “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.”
The Responsive founders and directors (Andrew McElroy, Marsh Middleton and Brandon Fairweather) stated: “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. 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.”
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