Innovation is an essential ingredient of successful software startups. Startup teams often adopt Agile practices in their startup journey, finding innovative solutions to address specific market-driven challenges. The goal of this chapter is to establish the state of the practice of how Agile methods (including practices, ceremonies, and rituals) leverage innovation in the context of software startups. Ten software startup practitioners working with Agile practices were interviewed. Based on the results, we conclude that the core Agile practices, such as iterative feedback loops, daily standups, periodic retrospectives, and reasonable sprint assignments, encourage Agile teams to innovate continuously. However, overfocusing on sprint completion and switching between sprints hinder Agile teams from pursuing innovative solutions. The adoption of Agile methods or practices depends on various influencing factors, such as team leadership, team conduciveness, task distribution strategy, and knowledge. We also found that Agile teams use various metrics to measure the output and the impact of their innovation, such as the number of introduced features and product quality to measure the output of innovation, while customer satisfaction and subscription are used to measure the impact of innovation. We use the innovation measurement model to better understand the relationship between the influencing factors and the measurement metrics. We also provide six recommendations on how to adopt Agile methods and practices into Agile teams.