He used the profits he made off a lurking traveller full of junk to hitch a ride on a passing prison ship.
This prison ship, after being attacked by marauding flying argonians who squawked terror, shipwrecked near Winterhold.
After signing many nord squealing fangirls briasts, the mudcrab merchant sidewalked to Winterhold and became an adept mage of the college..
..one day, a few months later, an experiment went wrong of his. This experiment was to use a scroll of icarian flight on Winterhold's foundations.
He thought making a city float would be original, might even get him a position as Archmage. Yeah! imagine that, Mudcrab Merchant the Archmage.
Well this experiment didn't work as planned. It kind of made the poor Mudcrab Merchant go through several walls of rock.. and destroy Winterhold city's foundations.
The hardy little mudcrab landed in unknown shores, upside down. But a familiar sunburnt melonhead was familiar to his sight and helped him up.
Oh it was Arrille! that sneaky launderer from Seyda Neen, with noble looking clothing? odd. Well the story goes that he returned to the Summerset Isles a few centuries ago. Set up a little business with an old bosmer friend of his.
Arrille happened to be the only altmer in the summerset isles to kill a daedra (accidently walked into a scamp with a butter knife) during the Oblivion Crisis. The other altmer witnessing the event were astonished and he used this to leverage his position among the current government.
Eventually he boasted that the altmer saved all mer kind by shutting the gates themselves, to gain even more respect from his fellow altmer.
Well the little mudcrab heard all this and his business sense tingled for a moment- he could see an opportunity in this!
So he told this crafty altmer that he should take an old idea and make it fresh, new once more. Arrille thought it was brilliant.
They created an empire, once seen before. But now with new ideas. Aldmeri Dominion it is called from lands beyond.
The inner councils of the thalmor call it.. the West Mudcrab Company.