Circus Street was established as a digital consultancy last September by another former Starcom Digital managing director, Jeremy Hill, together with Henry Stokes, who was previously a group account director at MindShare.
All three worked at Mediavest before it became part of Starcom and were influential in establishing Starcom Digital.
Circus Street is now seeking to do media planning and buying for clients and founder Hill explained this was a reason that it felt a third partner was needed.
"Richard's coming in is to take us from a consultancy to a full-on digital agency," Hill said.
He added that Townsend would not have singular responsibility for media planninng and buying, but his addition marked the expansion of the agency into that area.
The new agency has worked so far on a consultancy basis with food company Nestle and with business publisher CMP Information, helping to guide both companies' digital strategies.
The company was appointed by Nestle to cover maternity leave for their digital media controller, Swati Lad.
Hill said that CMP Information "has about 95 websites and we are trying to work out what we should do with them".
Townsend was head of Starcom Digital until the end of 2003, when he took time away from the industry and Hill was the boss of the agency's digital arm until July of last year.
During his time at Mindshare's digital division, formerly called More but now Mindshare Interaction, Stokes was responsible for Nike and American Express.
Hill added: "We are looking at expanding in the market. We are going to be planning, buying and will have search."
The Circus Street founder added that the company will probably recruit in the coming months to cope with the extra responsibility of planning and buying.