Rumbu Holdings Investment Thesis
CAD $12M Market Cap, Zero Cyclicality, and a Decade-Long Runway
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Rumbu Holdings runs funeral homes in small towns across Western Canada.
There is no technological disruption coming for the funeral industry.
There is no demand volatility.
There is no customer churn.
Death is the most reliable demand driver in any economy - and in Canada, it’s growing. The population is aging, and annual deaths are projected to rise steadily for the next two decades.
The company is run by a husband-and-wife team with over 35 years of combined experience in the funeral business.
They’re not financial engineers. They’re operators - and they’re quietly rolling up small, family-owned funeral homes at attractive valuations in markets the big players don’t touch.
The model is capital efficient. The industry is boringly stable. And at a ~CAD $12M market cap, almost nobody is paying attention.
In the rest of this post, I discuss:
The acquisition economics and why they create a powerful flywheel
How the financing structure creates an arbitrage
The revenue trajectory and financial turnaround
Bear, Base, and Bull valuation scenarios
Risks to the thesis
My opinion and whether it’s in my portfolio