Jared Kushner's post-White House business ventures included a misguided investment in an Amazon aggregator.

• After leaving the White House, Jared Kushner made an early investment in an Amazon aggregator called Unybrands.
• In early 2022, his firm invested $75 million in a deal that was not publicly disclosed, coinciding with the market's peak.
• Unybrands experienced a slowdown in growth, resulting in layoffs and filings revealing that the company is now under the control of Affinity Partners, a firm founded by Kushner in 2021.

In March 2022, Jared Kushner was summoned to appear before the Jan. 6 House committee to discuss the Capitol attack that took place during his father-in-law's presidency. At the same time, Kushner was engaged in private business deals, one of which led him to a problematic area of an e-commerce empire.

In advance of his testimony in Washington, Kushner and colleagues from his private equity firm, Affinity Partners, met with Unybrands at its headquarters in Miami, according to sources who requested anonymity due to the confidential nature of the discussions.

In 2020, Unybrands, one of the many Amazon seller aggregators, was able to raise more than $16 billion from top investors with the goal of acquiring independent sellers on Amazon's marketplace.

In 2021, Kushner founded Affinity and attracted attention for raising $2 billion from the Saudi government, a controversial move given the close ties between the Trump administration and Saudi Crown Prince Mohammed bin Salman, who U.S. intelligence officials claimed was behind the murder of journalist Jamal Khashoggi in 2018.

Kushner entered the Amazon aggregator market at the worst possible time, as the tech bubble burst in 2021 following a record wave of venture investment, and rising rates and inflation in 2022 led to slowing growth and layoffs across the industry, including at Unybrands.

Adam Neumann, co-founder of WeWork, introduced Kushner to Unybrands, a tech entrepreneur whose company had financial ties to Saudi Arabia, two sources said. WeWork had previously raised billions of dollars from SoftBank and its Saudi-backed Vision Fund prior to its failed IPO in 2019.

In 2021, Neumann's family office invested in Unybrands, which has an operation in the U.K., around the time of the aggregator market's peak. Neumann, who was later removed from WeWork by top SoftBank executives, introduced Kushner to Unybrands early the following year.

On that March day, Unybrands' C-suite met with Kushner and his team for approximately 90 minutes, and demonstrated some of the diverse range of products the company had acquired, including dietary supplements, cookware, microwavable weighted stuffed animals, and the top-selling nail dryer on Amazon, according to sources.

A month after the meeting, Kushner wrote Unybrands a check for $75 million, according to documents viewed by CNBC.

Unybrands was one of Affinity's earliest private equity deals, which has not been previously reported. Since then, the firm has invested in several other companies, including a fitness technology startup, an online classifieds operator, and a solar financing company, totaling a reported $1.2 billion in investments to date.

In 2022, Kushner was investing in Unybrands, but tech stocks were crashing. The IPO window shut and venture funding dried up for cash-burning startups. The Amazon aggregator market, which had thrived during the pandemic, began to decline as consumers tightened their budgets and more people returned to physical stores. Aggregators that had previously hosted extravagant parties and given away Teslas for referrals were now struggling for cash.

The cost of operating a business on Amazon increased, making it challenging for aggregators to maintain profitability. As a result, layoffs occurred, and some companies divested from underperforming brands.

In February of this year, Thrasio, a high-profile company valued at $10 billion, filed for bankruptcy and subsequently lost its CEO and several top executives, as previously reported by CNBC.

Across the space, distressed deals have been taking place. Razor Group, which counts L Catterton and 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.

Recent reports indicate that Dragonfly, backed by L Catterton, had discussions with Heyday about a merger, but the negotiations fell apart.

Heyday didn't respond to a request for comment.

In February, Unybrands began seeking a buyer and sent a deck to prospective acquirers and investors, a source revealed.

Unybrands stated in an email that the company examined strategic possibilities in the aggregator industry, which was experiencing significant disruption, in 2023. However, after careful consideration, Unybrands and its investors decided to continue raising funds internally.

Affinity invested in Unybrands in 2022, but the amount raised from Kushner's firm was not disclosed.

'Kick-the-can' mergers

Sources close to several deals told CNBC that some consolidation is being fueled by lenders who want to avoid write-downs. Jason Somerville, a founding partner of consulting firm GW Partners, also expressed this sentiment.

"Somerville described the merger as a "kick-the-can" approach, combining common debt or equity mergers to restructure debt in distressed situations."

In March 2022, Unybrands' year-over-year revenue growth slowed to 11%, compared to 27% in February and 34% in January, as per internal documents reviewed by CNBC.

In November 2022, the company laid off approximately 10% of its staff, according to sources. Unybrands also conducted job cuts in two separate rounds last year, the people added.

Unybrands experienced nearly a 20% growth in 2022 and achieved its target, although it did not disclose the percentage of that growth that came through acquisitions. The company stated that it has never had a month with declining sales and has prioritized profitability and positive cash flow.

Despite not directly addressing layoff queries, Unybrands disclosed that its headcount has increased from 115 employees in January 2022 to over 230 employees as of this year.

Kushner's investment in Unybrands was part of an expanding portfolio as he embarked 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.

The Public Investment Fund of Saudi Arabia, which manages $925 billion in assets, has been investing in big-name technology companies to diversify the kingdom's revenue away from oil. Affinity, a company backed by the fund, has reportedly received hundreds of millions of dollars from wealth funds in the United Arab Emirates and Qatar.

The House Oversight Committee launched an investigation in 2022 to scrutinize the sources of capital received by 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, and to determine whether Kushner's financial interests influenced Trump's foreign policy.

Despite the scrutiny of Saudi Arabia's human rights abuses by Congress and the rest of the world, including the murder of journalist Jamal Khashoggi and the crackdown on political dissidents, your support for Saudi interests remained unwavering, as written by Carolyn Maloney, D-N.Y., in a letter to Kushner in June 2022.

Democrats' efforts to subpoena Kushner have been delayed by Republicans on the committee.

Senator Ron Wyden, D-Ore., launched an investigation into Affinity on Wednesday, stating on his website that he is seeking information about the millions of dollars in payments Kushner receives from the Saudis and other foreign sources annually, while using private investment fund disclosure loopholes to conceal the arrangement from public view.

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

Taking control

Despite the market turmoil, Unybrands was still trying to expand in February of this year. The company announced a new funding round of an undisclosed amount from unnamed investors, along with the acquisition of another company that would bring in six new brands to its portfolio. Additionally, the investment would be used to repay $300 million in debt owed to asset management firm Crayhill Capital Management from a financing round in 2021.

The board of Unybrands was restructured, with co-founder and CEO Ulrich Kratz, a former executive from Barclays and Goldman Sachs, stepping down as a director, along with the other two co-founders, as per filings.

In a February LinkedIn post, Kratz celebrated the new funding as a "huge day" for Unybrands.

He stated that we are now in a better position than ever to cater to our customers and offer appealing exits to successful entrepreneurs.

In March, Unybrands transferred control of the company to a new entity owned by Kushner and affiliated with Affinity called AP Investments II, as per filings with the U.K.'s corporate register.

UBHoldCo was reincorporated as Unybrands two years after Kushner's initial meeting with the company, according to U.K. records. AP Investments II retains control over the business, as indicated by filings.

UBHoldCo is controlled by the relevant legal entity, which holds 75% or more of its shares, according to the filing.

Unybrands acknowledged the ownership change in a memo to shareholders about the funding round last month, but did not confirm Affinity's involvement.

"The memo from Unybrands stated that the Crayhill debt was repaid as part of the financing, and changes were made to the corporate structure, resulting in the transfer of the group's operating assets to a new entity."

Affinity's chief compliance officer Ian Brekke and partner Asad Naqvi are directors at UBHoldCo, while Affinity partner Bret Pearlman and Max Fink are directors at Unybrands' original holding company.

Unybrands' corporate structure is unclear regarding how entities and their boards operate. The company recently informed shareholders that "our investor" finalized its tax structuring and would provide more details on financing soon, as per a document viewed by CNBC.

Unybrands is currently consolidating its operations under a single entity with a board comprised of its "operating partners" and investors, including Affinity, Neumann's family office, and angel investors. Kratz remains the leader of the business.

Multiple requests for comment were not responded to by representatives from Affinity, as well as by Brekke, Naqvi, Pearlman, and Fink.

Eugen Miropolski, co-founder of Unybrands and former COO of WeWork, reportedly developed a relationship with Neumann while he was in the Trump administration.

Since Affinity took control of Unybrands, several high-profile executives have departed, including CFO Robyn Laguette in March and Vice President of Growth Mark Goldfinger in April, as confirmed by his email to CNBC.

Recently, Kushner stated that he is focused on investing and won't be returning to the White House if Donald Trump loses the November election. Despite this, he has never publicly spoken about Unybrands or acknowledged his firm's investment in the company.

At an Axios event in February, Kushner stated that his current goal is to concentrate on his firm.

Despite Unybrands being a small write-off for his multibillion-dollar firm, other questions remain unanswered.

In October, Kushner was a guest on the "Lex Fridman Podcast," which has hosted a diverse array of guests including Jeff Bezos, Sam Altman, and Ye.

Kushner stated that he has not been charged with any legal or ethical violations regarding Affinity's backers and that one of his objectives with the company is to establish economic ties between the Gulf and Israel.

"Kushner stated, "I believe we are performing exceptionally well with it." Regarding criticisms, he added, "I have been criticized for every action I have taken throughout my life. However, this business is based on results. In three to five years, let's evaluate my performance. I hope I will excel, and please judge me based on that.""

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