Basil Darwish, Managing Director at Wells Fargo Strategic Capital — Promoting Fintech Growth Via CVC
In this episode, I’m joined by Basil Darwish, Managing Director and Fintech & Enterprise Tech lead at Wells Fargo Strategic Capital.
Basil and I cover a range of topics, including:
Basil’s Background and Journey to Venture Investing:
Basil completed his B.Sc. and M.S. degrees in electrical engineering in 2001 and subsequently started his career in the tech industry, initially in the domain of semiconductors and subsequently in embedded software development. Later, he received his MBA from Wharton and began working as an investment banker at Citibank. Around 12 years ago, Citigroup decided to expand its innovation function into global venture investing. Basil took this opportunity to relocate to Singapore and cover venture investing in Southeast Asia. Basil describes this as an “eye-opening experience” which helped him realize how much 600 million people across the region relied on technology and innovation to better their lives. Eventually, Basil moved back to Silicon Valley to continue venture investing in the United States, expanding into the enterprise software domains of cyber security, machine learning, and AI opportunities.
Wells Fargo Strategic Capital:
Basil joined Wells Fargo in 2016 to help build out its corporate venture capital (CVC) practice, now known as Strategic Capital, joining as the team’s first hire to lead the focus on fintech and enterprise IT. Unlike some CVCs, the Strategic Capital team sits within the bank itself. This allows Basil and his team to work closely with the rest of the bank and identify synergies with their portfolio companies. In fact, the vast majority of investments made by the team have collaborated with the bank in one way or another. The investment team is stage agnostic and typically invests in startups post the stage of product-market fit. The team’s ticket size is typically between $5M — $30M, and their portfolio companies span North America and the UK.
Basil and I dive deeper into three investments the team has made recently:
- Trovata: The company is focused on modernizing the office of the CFO, particularly the treasury management function for small and medium-sized companies. The finance function for small businesses typically has only a few employees who complete a significant amount of manual work in Excel. Trovata focuses on easing this burden by leveraging open banking and machine learning technologies to provide automated multi-bank cash reporting, reconciliation, and cash flow forecasting. Through Trovata, finance functions can focus on strategic, value-add initiatives, rather than serving predominantly as a reporting function. In January 2021, Wells Fargo Strategic Capital led Trovata’s $20M Series A round. Last October, Trovata and Wells Fargo’s commercial and corporate banking division announced a joint go-to-market strategy.
- H20.ai: Starting around 2014, Basil noticed a significant growth in corporate use cases that could leverage AI/ML. Along with that, he noticed a shift in the market from “Applied AI” companies that abstract complexity and offer corporates a point solution, to Platform AI companies that enable corporates to cultivate their own AI capabilities and internally develop critical AI/ML applications as a source of competitive advantage. H20.ai actively facilitates this trend. The company’s mission is to democratize AI by offering corporates across industries the software tools needed to develop AI-based applications. Wells Fargo Strategic Capital led the company’s $40M Series C round in 2017 and participated in the subsequent Series D and E rounds.
- Arkose Labs: Arkose Labs is a leading fraud prevention company that takes a “fresh and effective” approach to fraud deterrence. The company delivers long-term fraud prevention and account security by “undermining the underlying economic incentives behind fraud attacks”. The need for Arkose Labs’ product has only grown during the covid-19 pandemic, with increased use of online services (including online banking, online gaming, e-commerce, etc.). Wells Fargo Strategic Capital invested in Arkose Labs’ most recent $70M series C round.
Basil Darwish is a Managing Director at Wells Fargo Strategic Capital and leads the group’s focus on Fintech and Enterprise Software. His investments range from early-stage to growth capital investments in companies that are strategically aligned with Wells Fargo. One of his goals is to bring technology-based innovation into the Bank. Basil’s investment focus areas include B2B/B2C Fintech, RegTech, AI & Machine Learning, Big Data Analytics, and Cyber Security.
Basil has been in the domain of venture investing for the past 12 years, across Silicon Valley, New York, and Southeast Asia. Prior to joining Wells Fargo in 2016, Basil was with Citi for 8 years most recently as Senior Vice President at Citi’s growth ventures and innovation group (Citi Ventures), where he focused on venture investments and innovation initiatives across the US and Asia, in the domains of Payments, Big Data Analytics, and Information Security.
Prior to moving into financial services, Basil spent several years in the technology industry in various roles across the value chain, from semiconductor product engineering and system-level product development at Analog Devices Inc, as well as digital design engineering at Chinook Communications, a technology startup that emerged out of MIT in 1999 developing spectrum enhancement technologies.
Basil currently serves as a board director of Trovata, H2O.ai, OpenFin, and Droit. He also serves as a board observer of Arkose Labs, Socure, Volante Technologies, Elliptic and Atscale.
Basil holds an MBA from the Wharton School of Business with a double major in finance and entrepreneurial management, a Master of Science Degree in Electrical Engineering from Tufts University with a focus on semiconductor design, and a B.Sc. in Electrical Engineering from the University of Jordan. Basil lives in the San Francisco Bay Area with his wife and two daughters.
About the Author:
Anirudh Singh is a second-year MBA Candidate at The Wharton School, where he is part of the Wharton FinTech Podcast team. He has a passion for economic development, venture capital, financial services, and all things FinTech. Don’t hesitate to reach out with questions, comments, feedback, and opportunities at email@example.com.
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