Why we invested: TRACT
In May 2024, Ada Ventures invested in Tract, a prop-tech startup that uses AI to source potential building sites and acquire planning permissions. We co-led Tract’s pre-seed round alongside our friends at Concept Ventures.
Tract sees itself as the first explicitly “YIMBY” prop-tech company. They say “yes” to real estate and economic growth by making it easier and cheaper to find land suitable for development. This could go a long way to solving the housing crisis; Tract could help make owning a house a reality for many who never thought it possible.
We’re thrilled to add them to the Ada Ventures portfolio.
So, what exactly does Tract do?
The process of obtaining planning permissions is long, costly, and complex — half of planning applications are rejected because of mistakes or missing documents. Tract can make this process easier.
Tract’s sophisticated planning engine:
1) identifies sites with favourable planning characteristics.
2) determines the sort of site they can build, and the sorts of documentation needed to do it.
The software digitises and organises massive amounts of local planning data, measures planning risk by analysing past applications and forecasts likely outcomes.
There are lots of interesting use cases. Obtaining permissions for smaller parcels of land is too complex and unpredictable to be a worthwhile investment for developers. If a player like Tract succeeds in increasing the speed and certainty of applications, it will unlock a completely unserved market of smaller land parcels. Similarly, it could free up land owned by large institutional landowners for productive use.
It could also maximise the potential value of land. A planning permission raises the median value of agricultural land from £20k/ha to £2.4m/ha.
Why does Tract fit the Ada Thesis and what got us excited?
If there’s one thing that the two main political parties agree on, it’s the need for more housing in the UK. Mortgages and rents make up an increasing portion of most people’s monthly budget. House ownership is an unattainable dream for many. The new government wants to tackle the crisis by building 1.5m new homes. That means 370,000 homes a year during their first term. It’s ambitious.
And that’s why we were so keen to invest in Tract. It’s a clear fit with our economic empowerment thesis. Tract’s technology could help millions of people become homeowners or bring down rents for struggling families. They’re a mission-driven company trying to solve a social problem.
We also have utter faith in the team who has built this tech. Co-founder and CEO Jamie Rumbelow has 15 years’ experience as a product engineer in startups. He’s an Entrepreneur First alumnus and an Emergent Ventures fellow. Co-founder and CTO Henry Dashwood is a data scientist and NLP expert.
They are both tech builders who already developed an early product which they are testing with landowners. They decided to apply their tech talents to the housing problem, because they are passionate about the housing space and the potential for positive societal impact if we can solve the supply of new homes problem.
How did the investment happen?
We were introduced to Jamie and Henry through connections at Entrepreneur First.
Looking forward
Tract plans to develop the technology to generate surveys, reports and other planning documentation.
The initial business model is to use the engine themselves. Tract will identify the most viable land, promote it on behalf of landowners, get planning permission for homes and sell the land to people who want to build houses, taking a percentage of the increase in value. Tract believes there are around 200,000 sites suitable for building in the UK which could benefit from the software.
This is what makes it so exciting. Recent breakthroughs in AI give us the chance to radically reimagine how citizens relate to bureaucracies. There is a messy, human-driven, capricious element to these bureaucratic processes — and the planning system is a particularly egregious example of this. Tract could overcome these flaws and deliver significant social impact. We want to help them achieve this.
