Founding a startup inside a scale-up is emerging as a dynamic trend in 2025, enabling established growth companies to foster innovation while leveraging their considerable resources. This article explores the mechanics, market impact, and investment implications of embedding entrepreneurial ventures within high-growth organizations.
What Happened
The practice of founders establishing a startup inside a scale-up—effectively incubating new, agile businesses within companies boasting rapid expansion and strong funding—has gained traction across sectors in 2025. According to a Bloomberg report, over 22% of European unicorns launched internal startup units or spinouts in the first half of the year, compared to 14% just two years ago. Major players such as Klarna, UiPath, and Delivery Hero have pioneered this approach, creating new revenue streams and diversifying offerings without diluting core brand value. As Klarna CTO Christofer Koch recently stated, “Building from within gives us access to capital and market data that most startups can only dream of.” SEC filings from Q2 also reveal a notable uptick in internal venture funding allocations among U.S. SaaS and fintech scale-ups, reflecting growing confidence in this intrapreneurial strategy.
Why It Matters
This evolution marks a significant shift from traditional corporate incubators toward a more founder-driven, autonomous model. Current market trends underscore why: analysts at ThinkInvest highlight that the average time-to-market for internally created ventures is 30% faster than standalone startups, largely due to existing infrastructure and customer access. With funding rounds in the external environment becoming both larger and more competitive—CB Insights reported a 15% year-over-year increase in median round sizes for Series B/C deals—the internal startup approach can mitigate fundraising risk while accelerating innovation cycles. The model also helps scale-ups compete for entrepreneurial talent amid record-low startup formation rates reported by the Kauffman Foundation in 2024.
Impact on Investors
For investors, the trend to found a startup inside a scale-up offers both diversification and risk. Publicly listed companies embracing this strategy, such as $UI (UiPath) and $DHER (Delivery Hero), are effectively building in-house options exposure: their core business remains stable while adjacent bets target emerging verticals. As Morgan Stanley strategist Elena Duarte remarked, “Investors should view these initiatives as structured call options—potential for outsized upside, contained by the parent company’s risk management frameworks.” However, analysts warn that internal ventures can also become capital sinks if not governed with strict performance metrics. Investors should scrutinize disclosures—including cash burn and equity allocation for internal units—when reviewing earnings reports or considering scale-up ETFs in the innovation sector.
Expert Take
Market strategists suggest that scale-ups founding startups internally are best positioned to thrive amid rising capital costs and a competitive innovation landscape. Analysts note that the success of these ventures hinges on balancing autonomy and resource allocation—too much control can stifle agility, while too little exposes the parent to operational risks.
The Bottom Line
Founding a startup inside a scale-up is reshaping the innovation and investment playbook in 2025, blending entrepreneurial energy with corporate strength. For investors seeking exposure to frontier technologies and agile market disruptors, tracking this trend—and the companies leading it—could provide meaningful alpha. As the practice matures, expect both increased disclosures and targeted investment products built around these next-generation growth engines.
For more on this trend, explore market analysis, in-depth start-up funding insights, and the latest investment insights at ThinkInvest.org.
Tags: internal startups, scale-up innovation, venture capital 2025, investor trends, unicorn strategies.
