Australian Financial Review
by Max Mason
25 Nov 2017
Venture capitalist Mark Carnegie has sold his stake in advertising business Banjo to the agency's founders Andrew Varasdi and Ben Lyttle.
Mr Carnegie and advertising veteran John Singleton each took a 20 per cent stake in Banjo when the business was set up in 2008, helping Mr Varasdi and Mr Lyttle start the agency with enough funding to go out and acquire tier management talent.
Mr Carnegie will now sell his entire stake back to Mr Varasdi and Mr Lyttle, who combined will own 80 per cent of the independent agency. Mr Singleton is staying on as a silent investor.
Mr Varasdi's relationship with Mr Singleton extends back to STW Communications – which came out of John Singleton Advertising and in 2016 merged with WPP – where he ran Singleton Ogilvy & Mather for four years.
"We were able to hire, because of the funding, those two or three key people even though we didn't necessarily have the business. Within six months of coming together and launching the agency, we were pitching and winning business against Ogilvy, M&C Saatchi and McCann."
Mr Varasdi said all the agency's initial investors were paid back the money they had put in after two or three years of Banjo operating. He said Mr Carnegie was a signiﬁcant presence in the agency in its early years and provided the founding duo with crucial advice.
"Mark and John have been really fair to me and Ben. Part of the reason they probably invested in this, I don't think they saw it as something that was going to be a massive money investment, but as an investment in people," Mr Varasdi said.
Mr Carnegie said after nearly a decade, it was the right time for him to step away from Banjo.
"When we started out we wanted an agency where the clients came ﬁrst and we wanted to combine the arts of selling and storytelling," he said.
"We have lived up to that philosophy at Banjo and now is the right time to step away and let Andrew and Ben take it to the next level."
Earlier this month, Mr Carnegie's venture capital fund MH Carnegie & Co led a $US50 million ($65 million) capital raising to fund clinical trials for wireless pacemakers in Australia, the US and Europe.
Earlier in the year, both Mr Carnegie and Mr SIngleton expressed an interest in Fairfax Media's 54 per cent stake in Macquarie Radio. Fairfax, publisher of the Financial Review, was subject to approaches from two private equity ﬁrms, TPG Capital and Hellman & Friedman, of which Mr Carnegie was advising in an unofﬁcial capacity.
Mr Singleton and Mr Carnegie wrote to the Fairfax Board requesting access to Fairfax's data room so they could secure funding for a bid for Macquarie Radio, of which the pair already own nearly 41 per cent.
"Contrary to the suggestions in the letter, Fairfax is not seeking offers or undertaking a process to realise its investment in Macquarie Media," Fairfax said to the Australian Securities Exchange in June.