Tract, an AI-driven proptech startup aimed at transforming the UK housing development landscape, has officially ceased operations as of April 2025. Despite raising significant venture capital in London and creating innovative AI tools for property development planning, the company failed to establish a sustainable business model.
During its operation, Tract secured substantial early-stage funding: a pre-seed round co-led by Ada Ventures and Concept Ventures in September 2024, with legal guidance from Bird & Bird. An additional pre-seed round of £744,000 followed in April 2024. However, the company closed its doors after nearly two years without revenue.
Addressing “the largest domestic political problem” in the UK
Founded in May 2023 by Jamie Rumbelow and Henry Dashwood, Tract aimed to tackle what they saw as “the largest domestic political problem” in the United Kingdom: housing shortages. The London-based startup developed AI solutions to overcome barriers in the planning system that impede housing development.
Operating at the intersection of property technology (proptech) and artificial intelligence, Tract sought to streamline Britain’s complex planning permission process. Their ambitious vision was to facilitate the building of one million homes over ten years in the UK.
Tract operated from May 2023 until March 2025, when the founders decided to cease operations and return the remaining capital to investors.
How Tract’s AI engine tackled property development
At its core, Tract’s AI-driven planning engine performed several key functions: identifying promising construction sites, recommending suitable development types, generating planning documentation, conducting surveys, and evaluating planning risks through analysis of historical application data.
The company targeted an underserved market of smaller land parcels typically overlooked by traditional developers. Tract aimed to bring efficiency to a traditionally opaque process by digitising and analysing local planning data. Throughout its brief existence, the company demonstrated agility in testing various business models to find product-market fit.
Their product iterations included Tract Source (a site-sourcing tool for property developers), Attract (a land-appraisal tool for landowners), Land Promotion (a tech-enabled land promotion service), and Tract Editor (their final product — an AI platform for drafting planning documents). Despite developing “well-received” technology, mainly the Tract Editor tool, none of these approaches generated meaningful revenue or secured committed paying clients.
What are the actual reasons for failure? Tract’s founders explain.
In a candid blog post on April 3, 2025, the cofounders detailed their venture’s failure, demonstrating remarkable transparency about both internal missteps and external challenges. Poor financial management and insufficient commercial focus emerged as key factors in their downfall.
The founders acknowledged overspending on non-essential items—including their website, contractors, and “a trip to America “— decisions Rumbelow attributed to “vanity and stupidity.” They prioritised technical development over building a sustainable revenue model.
Market challenges proved equally significant. The conservative property sector, operational complexities, low willingness to pay, and market fragmentation hindered progress. The UK property industry’s resistance to technological innovation complicated software sales, while land promotion activities revealed unexpected timeline and operational challenges.
Despite creating valuable tools, the team encountered minimal market readiness for their solutions. The structure of the UK property market itself limited opportunities for significant disruption. From their experience, the cofounders offered six key lessons for other entrepreneurs:
- Get to the US – larger, higher-quality market, better ecosystem for building companies.
- Focus on market quality – receptive customers, clear decision-makers, fast learning cycles.
- Stay lean until you have proven revenue.
- Be aggressively commercial from day one.
- Test hypotheses quickly and thoroughly.
- Always ask yourself, “what have I learned from customers?”
The future of the UK proptech industry may not be as promising as it appears
The closure of Tract reveals crucial insights about the UK PropTech sector’s challenges. While investments are projected to reach £2.66 billion by 2024, the industry faces significant hurdles in a conservative, heavily regulated field. Despite developing advanced AI tools, Tract struggled to attract paying customers in this change-resistant sector.
The company’s experience highlights fundamental challenges: market resistance, complex regulations, and difficulties in revenue generation. This raises important questions about the scalability of property technologies, particularly in heavily regulated processes like planning permission.
Looking ahead, entrepreneurs must consider whether traditional venture capital is suitable for proptech innovations or if patient funding sources might better match the market’s gradual pace of change. Tract’s story emphasises the need for better alignment between business strategy and market conditions, suggesting that successful proptech ventures will need strong public-private collaboration and a focus on practical solutions that deliver clear value to industry participants.
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