How Mobile Game Studios Secure Series A

The approach to building a billion-dollar mobile gaming company in 2025

Since starting as an angel investor in 2019, then joining Play Ventures in 2021, and later founding F4 Fund in 2023, I've evaluated and observed over a hundred mobile free-to-play game studios during their venture capital fundraising rounds, both as an active investor and as a market observer.

I've studied not only the circumstances of these fundraising rounds, but more importantly, how companies successfully navigate the VC journey to eventually secure Series A funding.

This analysis excludes companies founded during the mobile gaming boom of 2012-2019. During that era, as I've previously discussed, even less experienced founders could launch a highly lucrative mobile game studio. Since then, the landscape has become increasingly challenging due to intensified competition and external factors like Apple's privacy changes. For additional context, I recommend reviewing my previous article on the challenges of mobile gaming investments before continuing.

This analysis examines a specific approach to:

1. Accelerating company growth

2. Maintaining majority founder ownership

3. Avoiding the common fate of studios that exhaust their resources before launching their first game

While this approach isn't the only path to success, nor is it a guaranteed formula, it represents a proven model for mobile game studios successfully securing Series A funding.

Let's first focus on product strategy and how that relates to funding. I previously wrote about product strategy in 2020. In that piece, I shared that:

It’s safe to say that building a new company to go entirely into mid-core is dangerous and lethal. But, developers can still have daydreams of mid-core success. The answer is to take on more complex projects gradually. Let me explain the thinking here.

Start with hyper or hybrid casual. Develop in three months, launch, and scale with profitable UA. You won’t gain top-grossing ranks yet. With every new title launched successfully, you can add a bit more complexity to the next game.

These aren’t significant steps and might cause anxious founders to feel uncomfortable that they aren’t doing the mid-core game yet. But these steps are controlled ones. At some point, the company will have financial stability from the live titles, to start taking on riskier projects — inch by inch, moving towards the mid-core bets.

— Product Strategy For Early-Stage Gaming Startup

Back then, this is my simplified analysis. But there's much more nuance to this, in order for a company to go from raising small amounts, to eventually graduating to Series A.

To elaborate, I'll share what doesn't work.

"Portfolio of games" approach

The horizontal approach, common in hyper-casual and hybrid-casual gaming, involves building multiple games simultaneously. While no single game in the portfolio may become a billion-dollar success, the strategy aims to create a collection of games whose combined value reaches billions.

However, this approach often falls short because top talent can typically focus on only one game at a time. Spreading these key contributors across multiple projects means each game receives adequate attention, but not the concentrated effort needed to create a mega-hit generating over $100 million annually.

The result is a portfolio of games with potential, but each falling short of its full potential due to divided design and product focus. While this approach can build a company valued at $50-80 million, it rarely creates the breakthrough success many VCs seek.

"One big game" approach

Most companies in my mobile gaming portfolio follow a common pattern: A credible team identifies a promising opportunity in a familiar genre and raises initial funding of $2-4 million. While the soft launch timeline is often projected at one year, reality frequently stretches to three years before a game, such as a Match-3 puzzle title or a mid-core character collector RPG, reaches release quality with sufficient content and competitive features.

This vertical approach of focusing on one major game has a significant weakness in today's VC funding environment, particularly for follow-on rounds. Without strong KPIs demonstrating product-market fit, specifically profitable user acquisition and clear growth potential through marketing spend, securing the next round becomes nearly impossible.

When this happens, companies typically resort to bridge rounds from existing investors. While this allows them to complete the game and generate the necessary metrics, it creates additional founder dilution without accelerating development. This leaves teams in a precarious position, unable to expand and operating with minimal margin for error.

But, there's a proven approach I've seen consistently secure Series A funding in the 2020s. This approach gives founders more control and enables significant company growth. I call this the “medium game first, big game second” strategy.

"Medium game first, big game second" approach

In this approach, the product strategy is simple:

1. The team starts with a pre-seed round and focuses on an arcade or hybrid-casual game they can build in 4 to 6 months. These games feature simple mechanics with unique twists, aiming for positive ROAS at launch through strong retention and monetization. The short development cycle offers crucial flexibility. If needed, they can pivot to another quick project without burning through their runway.

2. Once launched, they aggressively scale user acquisition, driving the game to generate tens of thousands in daily revenue.

3. With proven success, they approach later-stage VCs. While their current game demonstrates their execution ability, the pitch focuses on their next phase: building a much bigger game. This ambitious vision justifies the tens of millions needed to compete with mobile casual gaming incumbents.

4. After securing the large funding round, they begin transitioning from their initial success, a game which is profitable but capped in scale, to developing a game with true billion-dollar potential.

This strategy is compelling from an investment perspective because it balances risk and reward effectively. Most importantly, it has been proven to be affective when raising Series A for a game studio. While the team focuses on their larger ambition, the initial medium-sized game provides meaningful downside protection, potentially generating tens of millions in annual revenue. Meanwhile, the big game offers the upside potential to transform the company into a mobile gaming leader.

Final words

Some might ask that isn't the "one big game" approach already achieving what the medium-first one tries to do? The answer is no, because of the lack of downside protection and proof that the team is capable of shipping games that they are able to scale, with limited pre-seed of a few million.

VC funding is a stages financing journey, and the "medium game first, big game second" is my favorite pick for VC compatibility in mobile free-to-play financing.