Freeletics: Strategic Corporate Venturing in a Digital Scale-Up

Going through a dynamic market change with increased user growth and competition, the digital fitness scale-up Freeletics GmbH (Freeletics) found itself at a crossroads in September 2020. Equipped with fresh funding of US$25 million, the chief executive officer and the business development lead discussed the path forward for the company. Its current successful offering, a digital fitness coaching app, promised continuous growth. However, changing market conditions during the COVID-19 pandemic, new user behaviours, and emerging technologies offered new opportunities—and new competition. Consequently, Freeletics had to diversify its business model with new offerings to strategically renew its competitive advantages while keeping the existing successful business growing. The chief executive officer and business development lead had to find an organizational approach that would allow them to start a new entrepreneurial journey without neglecting what they had already built.

This case is suitable for use in senior-level undergraduate and graduate courses that deal with the multifaceted theme of strategic corporate venturing (CV). The case can also be used in strategic management, corporate entrepreneurship, or organizational design courses, where it complements discussions on dynamic capabilities, strategic entrepreneurship and CV, and organizational ambidexterity.<br><br\>After working through the case and assignment questions, students will be able to do the following:<br><br\><ul><li>Apply established strategic management theories of dynamic capabilities and organizational ambidexterity to strategic management challenge of strategic renewal for a digital scale-up company in a dynamic, uncertain environment.</li><li>Define the scope of new business for a corporate venturing (CV) project based on an understanding of possible product/market combinations.</li><li>Assess and select a suitable organizational logic to establish a CV project for the strategic renewal of a scale-up company based on an understanding of possible organizational design dimensions.</li><li>Design a suitable organization for a strategic CV unit or team based on the selection and specification of relevant organizational characteristics.</li></ul>

• corporate venturing
• corporate entrepreneurship
• strategic renewal
• corporate venturing unit
• organizational ambidexterity