[Edaily Marketin Song Seung-Hyeon Reporter] The usual process is to finish developing a game before seeking users. ActionFit has flipped that order. With the game only 30 percent complete, the company first tests ad creatives and only completes development on titles where the cost per install meets its target. It is a mobile casual game development and publishing company that opened in March 2020.

According to the venture capital (VC) industry on the 7th, Kona Venture Partners, which participated in ActionFit’s Series A round last July, also participated in this recent follow-on investment. This round was led by Kolon Investment, with Korea Omega Investment & Finance and Translink Investment also participating. Following a previous round in November 2023, in which the company raised approximately 1.6 billion won from these three firms, the cumulative funding raised through Series A has reached 7.4 billion won.

Last month, the company raised an additional 15 billion won, bringing its cumulative funding to approximately 22 billion won. Participants in this round included Atinum Investment, Kolon Investment, and HB Investment. Kona Venture Partners is a gaming-focused venture capital firm founded in 2018 by Choi Hwa-jin, former CEO of Capstone Partners. It manages the “Kona Global IP Investment Fund,” a 120 billion won fund backed by 58.8 billion won from Nexon Partners and 60 billion won from the Ministry of Culture, Sports and Tourism’s master fund.

CEO Park In-hoo has a background in ad tech, having worked at InCross and AdColony. The company’s name is an abbreviation of “Action First.” For the first three years after its founding, the company sustained itself by publishing games from domestic developers overseas without any external investment. CEO Park stated, “The reason we’ve grown rapidly while generating stable revenue over the past three years without external investment is due to the domestic developers who supplied excellent games and Action Fit’s aggressive global marketing strategy.” The company began in-house development in 2024.

The development process begins with 20 to 30 test games each month. Marketers select games to benchmark and also take on the role of product managers. A team of three—comprising a marketer, an artist, and a developer—creates a prototype in one to two weeks, runs ads on the U.S. Android market, and analyzes the cost per install. If a game fails to meet the criteria, it is immediately scrapped. Out of the 100 to 200 games tested each year, only one or two survive. CEO Park said, “In the past, if we considered a finished game to be 100, we would test it only after developing about 10 percent of it, but now we check user reactions even when the game is only about 3 percent complete.”

“Pajinyang,” an in-house title released last August, is the result of this screening process. Within four months of launch, it surpassed 10 billion won in cumulative revenue and 3 million downloads. More than 90% of revenue came from overseas. It climbed to No. 6 in the U.S. and No. 2 in Japan on the Apple App Store’s casual game download charts. Company-wide, the breakdown of revenue by country is 45% from the U.S. and 20% from Japan. According to company figures, cumulative downloads total 30 million, and cumulative revenue stands at 40 billion won. Last year, the company received the “7 Million Dollar Export Award.”

Revenue increased from 7.41 billion won in 2022 to 8.44 billion won in 2023, 13.11 billion won in 2024, and 26.19 billion won last year. However, after posting an operating profit of 330 million won in 2022, the company slipped into the red, with losses widening to 4.44 billion won last year. Since the business model involves spending on user acquisition first and recouping those costs later, losses grow in tandem with increased advertising spending. The company is targeting 80 billion won in revenue this year.

What’s noteworthy is ActionFit’s market position. Hybrid casual games—which combine in-app purchases and advertising revenue—are the fastest-growing segment in the global casual game market. The industry estimates this market will grow by approximately 94% from last year’s $18.4 billion to 2032. CEO Park noted, “The global casual game market is dominated by companies from Europe—particularly Turkey—as well as Vietnam and China.” In South Korea, companies such as Neptune and 111 Percent are also competing in this space.

ActionFit is expanding its business by increasing the number of new titles in the hybrid casual and merge genres, while also taking on the role of conducting ad testing, data analysis, and monetization validation on behalf of external developers.