Founding clients include Hand Picked Hotels and the clothing chain New Look.
The agency is also working on projects for Hyper Happen, Fallon's digital arm. These include the insurance business More Th>n, which pulled its digital account out of glue London in January.
Davies is also developing a content division and is planning the launch of a football channel for 2.5G and 3G mobile phone handsets called ontheterraces.com. The service will initially feature football players delivering terrace chants on video and will be distributed via the 3 and O2 networks.
Justin Copplestone, a former Good Technology creative director, has joined Vexed as its creative director. Ben Strawson, also ex-Good Technology, has joined as the technical director.
According to Davies, Vexed has been set up to make the most of developments in broadband and video content. He said: "The way that digital platforms are moving, it's much easier to move quickly if you are a start-up.
"Mobile is particularly interesting and clients and agencies have to be prepared to experiment with new platforms and learn by testing the market."