Ulrich Kratz and the business of knowing when to let go

Ulrich Kratz went to Hawaii to take a break. He had spent years in consumer and retail banking, helping business owners think through consequential transactions. Before starting something of his own, he wanted time on the water. Kite-surfing was on the agenda. Building an e-commerce company came afterward, in mid-2020. Even a carefully chosen interval between jobs can acquire a rather demanding sequel.

The company was unybrands. Kratz founded it with Eugen Miropolski and Christian Harnischfeger to buy small online businesses, combine their operating resources and help them grow. His new work put him on a different side of a familiar conversation. He had advised entrepreneurs who wanted to sell. Now he would be an entrepreneur asking them to hand over the keys.

A pause with a very good view

Hawaii was a pause before an intended entrepreneurial chapter. By the end of 2019, Kratz and his wife had decided to return to the United States after years in Europe. He got several months of kite-surfing into the break before work on unybrands began. There is something pleasingly literal about a consumer-retail banker giving himself a change of scenery before a change of occupation.

Miami already meant something to him: he had married there in 2011. When unybrands prepared to establish its headquarters in Miami Beach in 2021, the choice had a practical appeal as well. Kratz liked the talent available and the time zone for a business working across the Atlantic. Geography would help organize the working day.

In that first chapter, his partners were associated with offices in Berlin and London. Kratz said all three founders spoke at least three languages. The enterprise began with an international outlook and a relatively small team. Its business would depend on moving knowledge, decisions and products between markets. Being able to talk across borders was a useful place to start.

An adviser changes seats

Kratz’s earlier career supplied a close view of consumer businesses. At Goldman Sachs, he became a managing director and worked in New York and London. At Barclays, he served as co-head of consumer and retail investment banking for Europe, the Middle East and Africa. His work included helping entrepreneurs sell companies. By the time he founded unybrands, the mechanics of a transaction were familiar territory.

His education had also crossed borders. He studied at the University of Passau, with periods at the London School of Economics and Pontificia Universidad Católica de Chile. Before university, he attended the Armand Hammer United World College. Passau appears on his public profile alongside a scholarship from Germany’s Studienstiftung. This was an international career before it became an international company.

The founding partnership brought other experience to the table. Miropolski’s background included Airbnb and WeWork; Harnischfeger’s included Morgan Stanley and DIA. Together, they proposed a company that needed to understand both transactions and online commerce. The banker's question about what a business is worth would sit beside the operator’s question about what to do with it on Monday.

That second question changes the nature of the job. An adviser can help a client reach a decision. An owner inherits the consequences, including the thoroughly unglamorous ones. A useful acquisition still has to become a functioning business inside a larger organization. The announcement gets a date. The work afterward gets a calendar.

The founder at the other end of the table

The businesses Kratz wanted were already doing something right. In 2021, he described a typical acquisition target as an Amazon seller with $1 million to $5 million in sales, selling products priced around $15 to $50. These were businesses with customers and commercial evidence behind them. His early criteria offered a fairly specific answer to the question of where to look.

He also preferred a defined set of product categories where the team had experience. Household goods, pet products, garden and outdoor items, and home and culinary products were among the areas of interest. Category knowledge matters because products bring their own operating demands. Expertise becomes more useful when it can be applied repeatedly rather than introduced afresh with every purchase.

Kratz’s account of the seller relationship allowed for different ambitions. Some founders wanted an upfront payment and an exit. Others wanted continued involvement and a share of future gains. The appropriate moment to sell depended on the person. In his early interviews, he emphasized getting to know owners before a transaction became urgent.

“We are bringing scale to small brands.”

Ulrich Kratz, February 2021

Small is an interesting word here. It describes the size of an enterprise, while leaving open how much it means to its owner. A business can occupy a narrow corner of a marketplace and a large part of someone’s life. For a buyer, understanding those two scales is useful commercial judgment. A valuation answers one question; confidence in the successor answers another.

At its February 2021 launch, unybrands offered shared resources to businesses whose growth had outrun their infrastructure or available capital. A founder could have a profitable product and still face a complicated next step. More sales create more purchasing, more coordination and more opportunities for an apparently minor operational mistake to become expensive.

Three verbs, several hundred responsibilities

The company compressed its approach into three words: buy, build, boost. It is an admirably economical description of a business with a less economical list of duties. unybrands would acquire a brand, bring it onto shared operations and work on its expansion. Supply chains, performance marketing, product lines and new markets all belonged to the plan.

Its public launch came with a $25 million equity seed round in February 2021. Backers included Nordstar, DIA Management, Day One Ventures and Airbnb co-founder Nathan Blecharczyk. The company had already completed initial acquisitions. Kratz was starting with capital and experienced partners, alongside the ordinary uncertainty of turning a plan into a repeatable operation.

In July, unybrands announced another $300 million in growth capital from Crayhill Capital Management. The intended uses included acquisitions, technology and recruitment. The financial scale had changed considerably in five months. The number remains a company financing figure, attached to a particular announcement and purpose.

Kratz’s technology plans were specific about the chores involved. In 2021, he discussed automating processes, using technology in due diligence, managing supply chains and collecting data to forecast supply and demand. Integration was part of the roadmap. The useful promise was that decisions across a collection of brands could become better informed and less dependent on disconnected routines.

There is a certain modesty to forecasting as an ambition. It does not produce a particularly cinematic demonstration. Yet a forecast connects the attractive part of retail, the sale, to the expensive part, having something available to sell. Kratz’s plan put that practical connection inside the company’s technology agenda.

For him, acquisition was one part of the value-creation story. He expected much of the value to come from building and improving the businesses afterward. That is a demanding proposition for a former deal adviser. The transaction skills help secure ownership. The operating system must justify it.

For Kratz, the category decision also sets limits on the organization he is building. A company that buys selectively can concentrate its attention, but each new brand still brings a history of choices made by someone else. Integration asks people to learn those choices before deciding which ones should change. That is a different rhythm from simply reaching the next deal.

His early emphasis on the team belongs in that context. Shared infrastructure only helps when people know how to use it for the particular business in front of them. A platform has to accommodate product differences as well as common routines. The founder running the buyer must decide where uniformity saves effort and where it erases something worth keeping.

Six brands, one larger obligation

On February 22, 2024, unybrands announced its largest acquisition to that date: an all-cash European deal adding six brands in home, lifestyle, juvenile and outdoor categories. It also announced a Series B funding round and a refinancing of its earlier credit facility. Neither the purchase price nor the funding amount was disclosed in the announcement.

At that point, the company reported close to 30 acquired brands and nearly $175 million in combined revenue. Those numbers describe its February 2024 position. They mark the distance from the company’s early ambitions without pretending to be a live counter of what followed.

Kratz described a strategy focused on brand quality, growth and profitability. The paired announcements showed how closely the pieces were connected. Expanding the portfolio meant bringing more businesses into the operation, while financing affected the room available to do that work. A buyer of brands has to keep an eye on both sides of the equation.

The business after the goodbye

The unybrands team page continues to list Kratz as co-founder and CEO. Its description of the company still centers on integrating brands onto a shared platform and operating across channels. The work he chose after banking has remained tied to the same basic handover: a founder sells; another organization becomes responsible.

That makes his second career a useful companion to his first. He knows the occasion when an entrepreneur parts with a business. He has chosen to build a company around the period that comes next. Customers have their own timetable, and it rarely includes a pause to admire the acquisition announcement.

The kite-surfing break offers a memorable opening to this story. The ending belongs to a more ordinary kind of persistence. Kratz went looking for an entrepreneurial chapter and found one in other entrepreneurs’ next steps. Every purchase hands his company a business that already has a past, and a future it has agreed to take on.