Jared Kushner’s post-White House deal-making included badly timed bet on Amazon aggregator

In
March
2022,
Jared
Kushner
was
called
to

testify
in
front
of
the
Jan.
6
House
committee
regarding
the
attack
on
the
Capitol
that
occurred
in
the
waning
days
of
his
father-in-law’s
presidency.
In
his
private
life,
meanwhile,
Kushner
was
doing
deals,
including
one
that
took
him
to
a
niche
and
soon-to-be
troubled
corner
of


Amazon’s
e-commerce
empire.

Weeks
ahead
of
his
testimony
in
Washington,
Kushner
and
others
from
his
private
equity
firm,
Affinity
Partners,
took
a
boat
from
their
beach
office
in
South
Florida
to
meet
with
a
company
called
Unybrands
at
its
headquarters
in
nearby
Miami,
according
to
people
familiar
with
the
matter
who
asked
not
to
be
named
because
the
talks
were
private.

Unybrands,
founded
in
2020,
was
one
of
many
players
in
the
then-booming
market
of
Amazon
seller
aggregators.
Companies
in
the
space
took
advantage
of
low
interest
rates
and
pandemic-driven
growth
in
e-commerce
to
collectively

raise
more
than
$16
billion
from
top
names
on
Wall
Street
and
in
Silicon
Valley
with
the
intent
of
rolling
up
independent
sellers
on
Amazon’s
marketplace.

Kushner
started
Affinity
in
2021,
shortly
after
leaving
his
advisory
role
in
the
White
House
alongside
his
wife,
Ivanka
Trump.
With
Affinity,
he
attracted
headlines
for
raising
some

$2
billion
from
the
Saudi
government,
a
highly
controversial
move
given
the

cozy
relationship
between
the
Trump
administration
and
Saudi
Crown
Prince
Mohammed
bin
Salman,
who
U.S.
intelligence
officials
said

approved
an
operation
to
capture
and
kill
journalist
Jamal
Khashoggi
in
2018.

When
it
came
to
the
Amazon
aggregator
market,
Kushner
was
jumping
in
at
the
worst
possible
time.
The
tech
bubble
was
bursting
following
a
record
wave
of
venture
investment
in
2021,
when
investors
across
the
globe
pumped
$621
billion
into
startups
and
high-growth
companies,
more
than
double
the
prior
record
set
a
year
earlier,
according
to

CB
Insights
data.
Rising
rates
and
soaring
inflation
in
2022
led
to
slowing
growth
and
layoffs
across
the
industry,
including
at
Unybrands.

Kushner
was
introduced
to
Unybrands
by
a
tech
entrepreneur
whose
company
also
had
financial
ties
to
Saudi
Arabia,
WeWork
co-founder
Adam
Neumann,
two
people
with
knowledge
of
the
matter
said.
Prior
to
its
failed
IPO
in
2019,
WeWork
had
raised

billions
of
dollars
from
SoftBank
and
its
Saudi-backed
Vision
Fund.

Neumann’s
family
office
invested
in
Unybrands
around
the
peak
of
the
aggregator
market
in
2021,
according
to
filings
in
the
U.K.,
where
the
company
has
an
operation.
Neumann,
who
was
ultimately
ousted
from
WeWork
by
top
SoftBank
execs,
introduced
Kushner
to
Unybrands
early
the
following
year.

For
about
90
minutes
on
that
March
day,
members
of
Unybrands’
C-suite
fielded
questions
from
Kushner
and
his
team,
and
showed
off
some
of
the
eclectic
mix
of
products
the
company
had
acquired:
dietary
supplements,
cookware,
microwavable
weighted
stuffed
animals
and
the
top-selling
nail
dryer
on
Amazon,
the
sources
said.

Kushner
was
impressed
by
what
he
saw,
they
said.
A
month
after
the
meeting,
he
wrote
Unybrands
a
check
for
$75
million,
according
to
documents
viewed
by
CNBC.

Affinity’s
investment
in
Unybrands,
which
hasn’t
previously
been
reported,
was
one
of
the
private
equity
firm’s
earliest
deals.
It’s
since
backed
a
handful
of
companies,
including
a
fitness
technology
startup,
an
online
classifieds
operator
and
a
solar
financing
company,
with
its
investments
totaling

a
reported
$1.2
billion
to
date. 

As
Kushner
was
getting
into
Unybrands,

tech
stocks
were
cratering.
The
IPO
window

slammed
shut
in
2022
and
venture
funding
dried
up
for
cash-burning
startups.
The
Amazon
aggregator
space,
which
had
blossomed
during
the
pandemic,
began
to
unwind
as
consumers
tightened
their
belts
and
more
people
returned
to
brick-and-mortar
stores.
Aggregators
that,
less
than
a
year
earlier
were
throwing
lavish
cocktail
parties
and
giving
away

Teslas
for
referrals,
were
suddenly
strapped
for
cash.

The
cost
of
doing
business
on
Amazon
—
from
advertising
and
listing
fees
to
shipping
and
fulfillment
—
continued
to
creep
up,
making
it
harder
for
aggregators
to
run
the
companies
they’d
acquired
profitably.
Layoffs
ensued,
and
some
companies
sold
off
underperforming
brands.

The
most
high-profile
collapse
was
Thrasio,
which
was
once
valued
at
a

reported
$10
billion
before

filing
for
bankruptcy
in
February
of
this
year.
The
company
then
lost
its
CEO
and
a
string
of
top
executives,

CNBC
previously
reported.

Distressed
deals
have
been
occurring
across
the
space.
Razor
Group,
which
counts
L
Catterton
and


BlackRock
among
its
investors,

acquired
SoftBank-backed
Perch
in
March.
Heyday,
backed
by
Khosla
Ventures,
has
been
exploring
tie-ups
with
other
aggregators,
a
former
employee
said.
The
company
laid
off
its
entire
creative
and
brand
teams
in
November,
said
the
person,
who
asked
not
to
be
named
because
of
confidentiality.

Heyday
approached
Dragonfly,
whose
backers
include
L
Catterton,
about
a
merger
but
the
talks
fell
apart
in
recent
months,
according
to
a
separate
person
with
knowledge
of
the
matter.

Heyday
didn’t
respond
to
a
request
for
comment.

Unybrands
also
began
seeking
a
buyer.
In
February,
the
company
sent
a
deck
to
prospective
acquirers
and
investors,
a
person
familiar
with
the
matter
said.

Unybrands
said
in
an
emailed
statement
that
the
company
explored
strategic
opportunities
as
the
aggregator
space
“was
full
of
disruption”
in
2023.
The
company
and
its
investors
ultimately
decided
to
continue
raising
funds
internally,
Unybrands
said.

Unybrands
confirmed
to
CNBC
that
Affinity
invested
in
the
company
in
2022,
though
it
didn’t
specify
how
much
it
raised
from
Kushner’s
firm.

Some
of
the
consolidation
is
being
fueled
by
lenders
who
want
to
avoid
write-downs,
sources
close
to
a
number
of
deals
told
CNBC.
Jason
Somerville,
a
founding
partner
of
consulting
firm
GW
Partners,
which
has
advised
sellers
and
aggregators
on
deals,
echoed
that
sentiment.

“I
call
it
more
of
a
kick-the-can
type
of
merger,
where
you
have
common
debt
or
common
equity
mergers,
and
they
jam
them
together
to
maybe
restructure
the
debt,”
Somerville
said.
“Pretty
much
100%
of
these
are
being
done
in
a
distressed
situation.”

At
Unybrands,
year-over-year
revenue
growth
had
slowed
to
11%
in
March
2022,
from
27%
in
February
and
34%
in
January,
according
to
internal
documents
reviewed
by
CNBC. 

Following
a
continued
slide,
the
company
laid
off
roughly
10%
of
its
staff
in
November
2022,
according
to
people
familiar
with
the
matter.
Unybrands
held
another
round
of
job
cuts
last
year,
and
again
at
the
beginning
of
this
year,
the
people
said.

Unybrands
told
CNBC
it
grew
almost
20%
in
2022,
reaching
its
target,
though
it
didn’t
say
how
much
of
that
expansion
came
through
acquisitions.
(A
representative
later
said
the
figure
referred
to
organic
growth.)
The
company
also
said
it’s
“never
had
a
month
with
declining
sales”
and
has
focused
on
profitability
and
generating
positive
cash
flow.

Unybrands
didn’t
directly
respond
to
questions
about
whether
it’s
conducted
layoffs.
The
company
said
headcount
has
grown
from
115
employees
in
January
2022
to
more
than
230
employees
as
of
this
year.

For
Kushner,
the
investment
in
Unybrands
was
part
of
an
expanding
portfolio.
Kushner,
now
43,
was
embarking
on
a
new
career
in
private
equity
after
four
years
in
the
Trump
administration.
Prior
to
that,
he
spent

nearly
a
decade
running
his
family’s
real
estate
business.

Affinity
is
backed
by
Saudi
Arabia’s
Public
Investment
Fund,
which
oversees
$925
billion
in
assets
and
has
spent
years

cozying
up
to
big-name
investors,
particularly
in
technology,
in
an
effort
to
diversify
the
kingdom’s
revenue
away
from
oil.
Affinity
also

reportedly
received
hundreds
of
millions
of
dollars
from
wealth
funds
in
the
United
Arab
Emirates
and
Qatar.

The
sources
of
capital
received
scrutiny
due
to
Kushner’s
diplomacy
work
in
the
Middle
East
while
he
was
in
the
White
House,
as
well
as
his
friendly
relationship
with
the
Saudi
crown
prince.
The
House
Oversight
Committee

launched
an
investigation
into
the
investment
in
2022,
looking
into
whether
Kushner’s
financial
interests
influenced
Trump’s
foreign
policy.

“Your
support
for
Saudi
interests
was
unwavering,
even
as
Congress
and
the
rest
of
the
world
closely
scrutinized
the
country’s
human
rights
abuses
in
Yemen,
the
murder
of
journalist
Jamal
Khashoggi
by
Saudi
assassins
tied
to
Crown
Prince
Mohammed
bin
Salman,
and
Saudi
Arabia’s
crackdown
on
political
dissidents
at
home,”
Carolyn
Maloney,
D-N.Y.,
who
was
chair
of
the
Oversight
Committee,
wrote
in
a
letter
to
Kushner
in
June
2022.

Republicans
on
the
committee
have

delayed
Democrats’
efforts
to
subpoena
Kushner
over
the
matter.

On
Wednesday,
Senate
Finance
Committee
Chair
Ron
Wyden,
D-Ore.,
initiated
a
new
probe
into
Affinity,
saying
in
a

release
on
his
website
that
he’s
seeking
“information
pertaining
to
the
tens
of
millions
in
payments
Kushner
is
receiving
from
the
Saudis
and
other
foreign
sources
every
year
while
exploiting
private
investment
fund
disclosure
loopholes
to
shield
the
arrangement
from
public
scrutiny.”

A
representative
for
Kushner
didn’t
respond
to
requests
for
comment.

Unybrands
was
still
trying
to
expand
as
early
as
February
of
this
year
despite
the
turmoil
in
the
market.
The
company

announced
a
new
funding
round
—
an
undisclosed
amount
from
unnamed
investors
—
alongside
the
acquisition
of
another
company
that
would
bring
in
six
new
brands
to
its
portfolio.
The
investment
would
also
go
toward
repaying
$300
million
in
debt
owed
to
asset
management
firm
Crayhill
Capital
Management
from
a

financing
round
in
2021.

At
the
same
time,
Unybrands
overhauled
its
board.
Co-founder
and
CEO
Ulrich
Kratz,
a
former
Barclays
and
Goldman
Sachs
executive,
resigned
as
a
director,
along
with
the
company’s
two
other
co-founders,
according
to
filings. 

Kratz
hailed
the
new
funding
as
a
“huge
day”
for
Unybrands

in
a
February
LinkedIn
post.

“We’re
now
positioned
better
than
ever
to
serve
our
customers
and
to
continue
to
provide
attractive
exits
for
successful
entrepreneurs,”
he
said.

While
Unybrands
provided
scant
details
about
the
investment,
filings
with
the
U.K.’s
corporate
register
show
that
in
March,
Unybrands
transferred
control
of
the
company
to
a
new
entity
owned
by
Kushner
and
affiliated
with
Affinity
called
AP
Investments
II.

Two
years
after
Kushner’s
first
meeting
with
the
company,
U.K.
records
show
Unybrands
reincorporated
as
UBHoldCo.
Filings
indicate
that
AP
Investments
II
maintains
control
of
the
business.

“The
relevant
legal
entity
holds,
directly
or
indirectly,
75%
or
more
of
the
shares
of
the
company,”
the
filing
says,
referring
to
the
firm’s
control
of
UBHoldCo.

Unybrands
acknowledged
the
ownership
change
in
a
memo
to
shareholders
about
the
funding
round
last
month,
though
it
didn’t
confirm
Affinity’s
involvement.

“As
part
of
the
financing
the
Crayhill
debt
was
repaid,”
Unybrands
wrote
in
the
memo,
which
was
viewed
by
CNBC.
“It
also
became
necessary
to
make
some
changes
to
our
corporate
structure,
which
has
meant
that
our
group’s
operating
assets
have
been
transferred
to
a
new
entity.”

UBHoldCo
lists
Ian
Brekke,
Affinity’s
chief
compliance
officer,
and
Affinity
partner
Asad
Naqvi
as
directors.
Unybrands’
original
holding
company
also
remains
active
and
lists
two
directors.
One
is
Affinity
partner
Bret
Pearlman,
a
former
Blackstone
managing
director
who
also
co-founded
Elevation
Partners
with
Roger
McNamee.
The
other
is
Max
Fink,
a
partner
at
Neumann’s
family
office,
166
2nd
Financial
Services.

It’s
unclear
how
the
entities
and
their
boards
operate
within
Unybrands’
corporate
structure.
The
company
notified
shareholders
late
last
month
that
“our
investor”
recently
finalized
its
tax
structuring,
and
that
it
would
share
more
details
on
the
financing
soon,
according
to
a
document
viewed
by
CNBC.

Unybrands
told
CNBC
it’s
in
the
process
of
consolidating
its
operations
under
one
entity
with
one
board
made
up
of
its
“operating
partners”
and
investors.
The
company
confirmed
its
most
recent
funding
round
included
Affinity,
alongside
Neumann’s
family
office
and
angel
investors.
The
company
added
that
Kratz
continues
to
lead
the
business.

Representatives
from
Affinity
didn’t
respond
to
multiple
requests
for
comment.
Brekke,
Naqvi,
Pearlman
and
Fink
also
didn’t
respond
to
requests
for
comment.

Neumann,
who

reportedly
had
a
relationship
with
Kushner
before
and
during
his
time
in
the
Trump
administration,
had
ties
to
Unybrands
through
its
co-founder
Eugen
Miropolski,
former
COO
of
WeWork.  

Several
high-profile
executives
have
also
recently
departed
Unybrands
since
Affinity
effectively
took
control.
CFO
Robyn
Laguette
stepped
down
in
March,
according
to
her

LinkedIn
profile.
Mark
Goldfinger,
who
was
vice
president
of
growth
and
was
involved
in
the
Affinity
deal,
left
in
April,
he
confirmed
in
an
email
to
CNBC.

Kushner
has
never
spoken
publicly
about
Unybrands
or
acknowledged
his
firm’s
investment
in
the
company.
He
said
recently
that
he’s
focused
on
investing
and
won’t
be
returning
to
the
White
House
should

Donald
Trump
defeat
President

Joe
Biden
in
the
November
election.

“I’ve
been
very
clear
that
my
desire
at
this
phase
of
my
life
is
to
focus
on
my
firm,”
Kushner

said
at
an
Axios
event
in
February.

While
Unybrands
may
end
up
as
a
relatively
small
write-off
for
his
multibillion-dollar
firm,
other
questions
are
still
swirling.

In
October,
Kushner

appeared
on
the
“Lex
Fridman
Podcast,”
a
popular
show
that’s
drawn
a
range
of
guests
from
Amazon
founder

Jeff
Bezos
and
OpenAI
CEO
Sam
Altman
to
Ye,
the
rapper
formerly
known
as
Kanye
West.

Asked
about
Affinity’s
backers,
Kushner
said
he
hasn’t
been
accused
of
violating
any
laws
or
ethics
rules,
and
said
one
of
his
goals
with
the
firm
is
to
build
“economic
links”
between
the
Gulf
and
Israel.

“I
think
we’re
doing
very
well
with
it,”
Kushner
said.
“In
terms
of
the
criticisms,
I
think
that
I’ve
been
criticized
in
every
step
of
everything
I’ve
always
done
in
my
life.
And
so
what
I
would
say
is
this
business
is
actually
an
objective
metric
business.
It’s
about
returns.
So
in
three,
four
years
from
now,
five
years
from
now,
see
how
I
do.
Hopefully
I’ll
do
very
well,
and
judge
me
based
on
that.”