Sleeping Giants: Why Corporate Spinouts Are Innovation’s Best-Kept Secret

For all its size and might, the modern corporation has become surprisingly poor at creating new businesses. Large firms spend heavily on digital transformation, venture accelerators, and internal R&D. They set up labs. They hire “intrapreneurs.” They talk — endlessly — about innovation. And yet, the net result is underwhelming. Few new ventures make it to market, and fewer still scale.

The truth is stark: most corporate innovation is incremental, internally focused, and ultimately constrained by the very structures meant to protect the core. But there is another path — one that is gaining traction across Europe and beyond. A path that blends the credibility and capital of a large company with the speed and agility of a startup. It’s called the corporate spinout.

Specifically, the minority-owned corporate spinout. And it might just be the most underutilized growth lever available to executives today.

Innovation, Unchained

In a minority spinout, a corporation takes a promising internal idea — often developed in the shadows of its business units — and spins it out as an independent venture. The corporation retains a minority equity stake, typically under 50%, while bringing in external founders and investors to lead and scale the business.

This isn’t just a rebranding exercise. It’s a structural shift in how companies think about growth. A minority spinout is free to raise capital, recruit entrepreneurial leadership, and sell to new markets — even to the parent company’s competitors. It trades the sluggish machinery of internal alignment for the urgency of product-market fit. And because the parent maintains a stake, it shares in the upside without shouldering the full operational burden.

The result? Ventures with sharper focus, faster cycles, and real-world traction — not just innovation theatre.

From Internal Project to Independent Player

Some of the most compelling startup stories of recent years began not in basements or dorm rooms, but inside global corporations.

Consider SQUAKE, the emissions-tracking platform that Lufthansa incubated and spun out in 2021. Originally built to help its own operations measure carbon impact, the platform now serves logistics firms and travel platforms around the world — backed by €5 million in VC funding.

Or Louisa AI, once an internal collaboration tool at Goldman Sachs. What began as a digital Rolodex for bankers evolved into a full-fledged enterprise networking platform — and was spun out in 2023 to pursue broader markets. With seed funding from Insight Partners and others, it is now selling to consulting firms, VCs, and professional services outfits.

Intel’s Articul8 AI is perhaps the most ambitious example. The enterprise GenAI platform was spun out with $100 million in funding and a mandate to serve sectors from defense to healthcare. Intel retained a minority stake, but handed operational control to a startup-savvy leadership team and an independent board.

These aren’t pet projects. They are de-risked growth bets that combine the best of both worlds — corporate substance and startup execution.

Why Spinouts Work — Especially in Europe

European corporates are particularly well-positioned to take advantage of this model. They are rich in technical assets, strong in brand credibility, and disciplined in governance. What they often lack is a mechanism to move quickly and independently when a new venture opportunity emerges.

Spinouts offer that mechanism. They are capital-efficient, founder-friendly, and increasingly attractive to investors who see the potential to scale proven technologies outside the gravity of the parent company.

And the model is maturing. What was once seen as a risky outlier is now becoming a standard playbook in industries ranging from aviation and infrastructure to fintech and AI.

Strategic, Not Symbolic

Unlike many internal innovation efforts, spinouts are not symbolic. They are structural. They force hard choices: Who leads? Who funds? Who decides? But in doing so, they also force focus.

They make it clear that new ventures must survive on their own merit — not on internal budgets or political sponsorship. They introduce governance, equity, urgency.

They create what most corporations struggle to build: real businesses.

And for the parent company, the benefits extend far beyond financial return. Spinouts unlock new markets without threatening the core. They attract talent that would never join a traditional corporate job. They give innovation teams a credible exit path. And they allow the company to build a portfolio of ventures that scale faster and learn faster than anything inside the walls.

So Why Haven’t You Done It?

If the model is so powerful, why do so few companies use it?

Because it requires letting go. It requires redefining success — not as control, but as shared value creation. It requires building new muscles in governance, talent, and venture finance. And, crucially, it requires leaders to ask a different question:

Not “How do we keep this in the group?”

But: “How do we give it the best shot at becoming great?”

The answer, more often than not, is to spin it out.

Final Thought

Across industries and balance sheets, the most valuable assets inside your organization may already exist. A promising prototype. A deep-tech stack. A visionary team.

But unless they are freed to operate, they are destined to stall — or fade.

So ask yourself this, as you glance at the org chart, the product backlog, the shelved initiatives:

Which of your company’s best ideas never got the chance to become a company?