SoftBank is eschewing investments in early-stage firms in favor of mature companies in a strategy shift under the helm of newly-appointed President Nikesh Arora.
"It's bigger bets in businesses where we believe they are beginning to exhibit trajectory, potential to break out and become a leader in their space," the 47-year old company president told CNBC on Friday. "We go invest in them, take a reasonable stake, 25-30 percent, and support them for the rest of their lives."
The new strategy comes after the announcement earlier this month that venture capital arm SoftBank Capital would be wound down. That means all future investments will now originate from parent firm SoftBank.
Arora, speaking on the sidelines of a tech conference in Hong Kong, pointed to overheated interest in early-stage startups as the reason for stepping back from those investments.
"It's the best time to be an entrepreneur. Capital is aplenty, there're lots of people looking to invest in companies; the market is pricing risk very low. You have a huge amount of unicorns or deckacorns out there where people are giving them a lot of money expecting management to execute and execution risk is even priced to zero," he said.
He notes there are likely half a million to a million companies looking for funding around the world.
"So, from our perspective becoming an investor in this market is tough."
SoftBank, a Japan-based investment holding company, boasts a market capitalization of $67 billion thanks to lucrative returns on investments, such as a $20 million stake in Alibaba purchased in 2000. Its latest investments include $20 million into ad-analytics platform Cinarra Systems and reportedly more than $76 million into U.S. online lender Social Finance, according to the Wall Street Journal.
But that's not to say smaller deals are entirely out of the picture.
"There's an old adage that exceptions make the rules. There will always be one or two companies that we find really exciting and say 'why not get involved.' But that's not what we will normally be looking for," he said.