Valtr was the fourth of six children born to Jewish parents in a small Moravian town, where his father ran a dry-goods and clothing store. The Krakauers spoke both Czech and German at home. Valtr attended German-language schools and also played soccer for the Maccabi Jewish team. After graduating from secondary school, Valtr enrolled in a fashion-design school in the city of Brno.

1933-39: In Brno, Valtr founded a factory that produced ready-made clothes. He closely followed the rise of Nazism in Germany and the March 1938 German annexation of Austria. Anticipating that Germany would invade Czechoslovakia, Valtr and his cousin Erwin emigrated to Palestine. Meanwhile, Germany annexed the Sudetenland in October 1938 and occupied Bohemia and Moravia in March 1939.