Global Composite Piping Solutions Is a One in 1,000 Anomaly - KingsCrowd

Analyst Report: Upgrade for access Global Composite Piping Solutions Is a One in 1,000 Anomaly

Global Composite Piping Solutions’ pipelines are lighter, more sustainable, and require less maintenance than common alternatives.

 
Details
Company: Global Composite Piping Solutions on Wefunder 2022
Security Type: Equity - Preferred
Valuation: $100,000,000
Min Investment: $100
Platform: Wefunder
Deadline: Apr 30, 2023
$5,000,000
Andy Gordon - December 14th

Lucky Timing

Note: This recommendation was co-authored by KingsCrowd Senior Investment Research Analyst Léa Bouhelier-Gautreau.


I’m “lucky.” Cheating is in my blood. If anything gives me an advantage as an investor, I’m all in.

I make no apologies — quite the opposite. The more unfair the advantage, the better I feel about the investment.

Don’t misunderstand. I’m not advocating for breaking the law or abandoning your moral compass. 

It’s more about ruthlessly gaining an edge. 

And not just in investing. It could be anything.

For example, I go to a lot of investment events. Sometimes, they hold a lottery. You drop your business card in a bowl. If it’s picked, you win.

I crumple up my card a bit before dropping it into the bowl. It’s a small edge. And the odds are still against me. But once, I won a free trip to Europe that way. 

Did I feel any guilt? Nah, not even a twinge.

I won a trip. I felt like a winner. 

And right now, investing in Global Composite Piping Solutions (GCPS) feels exactly like cheating and winning. 

When I first came across this raise just a month ago, it didn’t feel that way. GCPS had a great product and appealing upside. But it had no money coming in. And no money paired with a $100 million valuation just wasn’t appealing. GCPS CEO Douglas Jones told me he was chasing a half-dozen large projects and had a good shot at capturing at least one of them. But I wasn’t sure if I believed him. Founders tend to overstate such things. 

Nonetheless, the company had a lot going for it. Its large-diameter thermoplastic pipes are made by fusing together multiple layers of tough and corrosion-resistant materials. These pipes could be a natural successor to concrete pipelines. They’re lighter… easier to install… and offer much lower upfront and maintenance costs while still being able to hold high pressure. 

Hundreds of concrete pipelines in the US (and thousands globally) that were originally laid down decades ago are now suffering from severe corrosion and serious leaks. They need to be replaced. 

The problem has become so extensive that the American Water Works Association (AWWA) calls our current period “The Replacement Era.”

The problem is real, large, and looming. And GPCS has a great solution. So — despite the high valuation — I thought it was definitely worth talking to one of the founders.

Then a remarkable thing happened.

In the middle of its raise, the company won one of the projects it was going after — a big one. It will take GCPS about a year to make the pipes for this project. And for this one year’s work, the company will generate several hundred million dollars in revenue. 

Its valuation has gone from too high to an incredible bargain — the kind of bargain only found if it were going out of business. The revenue-to-valuation multiple is not 10-to-one (which would be entirely acceptable). It’s not five-to-one, which would be considered dirt cheap. It’s not even one-to-one, which would be unprecedented and raise eyebrows, as in “what’s the catch?”

No, the multiple is less than one-to-one. In 99.9% of cases, that would indicate a scam is being foisted on investors. 

But just the opposite is happening. Not only is GCPS getting a huge check for its work, but the project should kickstart the company’s ability to capture other large projects. 

Literally overnight, GCPS has gone from pre-revenue to being on the verge of producing notable revenue… from medium-to-high risk to low risk… from expensive to an incredible bargain. 

It is that true 0.1% anomaly — in a good way. 

It is an incredible opportunity for investors — and all the more reason to make absolutely sure the company checks out. At this point, what you need to know is:

  • Is the problem truly real, massive, and urgent?
  • Does GCPS offer the best solution?
  • Does its technology work as claimed?
  • And are there any major disincentives to widespread adoption?

Let’s take these issues one at a time.

Pay Annually
and save 17%

This article requires: Edge Pro

Full site access including KingsCrowd's qualitative analyst reports.

$
49.95 /month
41.58 /annually
 

What's included

  • Everything in Edge, plus
  • Full access to detailed Analyst Reports (e.g. Top Deal, Deal to Watch, Neutral, and Underweight)
  • Search and filter based on Analyst Reports
  • In-depth risk ratings for every raise

Get access to the first and only premium analytics and rating platform that enables informed startup investments.

Join the KingsCrowd insiders!

Sign up for our 3 minute newsletter with fresh takes on the investments you should know.

We care about the protection of your data. Read our Privacy Policy.