Danny Rimmer, a Partner in Index Ventures, speaks at the 2014 Web Summit in Dublin | Paul McErlane/EPA Britain falls behind France in venture funding after Brexit Divorce brings potential changing of guard in tech as UK venture capital firms get less EU cash.

Britain is losing ground to other European countries when it comes to raising new funds for tech startups, according to an analysis of the region’s venture capital industry provided to POLITICO.

The report by data provider Dealroom shows that the U.K. — home to many of the Continent’s largest venture houses, such as Index Ventures and Balderton Capital — was outpaced by France in venture fundraising during the first half of the year, while Germany almost matched Britain in new investments over the same period.

This potential changing of the guard in Europe’s tech industry comes as the European Investment Fund, the Luxembourg-based EU agency that remains the largest backer of venture funds in the region, stopped funding British venture capital firms following the Brexit vote, according to several fund managers who have held discussions with the body in recent months.

While the European Investment Funds refutes these claims, the EU agency concedes there has been a slowdown in approving new funds for British venture capital. That investment has been worth collectively hundreds of millions of euros to the industry, representing roughly one-third of the money provided to British funds, which have backed many of the country’s most high-profile startups.

"We're in a messy, awkward situation," said Simon Murdoch, a partner at Episode1 Ventures, which is raising a new fund of up to £60 million and whose discussions with the European Investment Fund ended abruptly earlier this year. "There's massive uncertainty for the next three to five years."

As EU funds dry up for British venture capitalists, their counterparts in France, Germany and elsewhere continue to pocket large checks for new tech investments. That also includes a growing amount of money offered by some of the region’s largest companies such as Nokia and Renault, which are desperate to keep pace with the latest digital advances.

French venture houses, for instance, raised €1.7 billion during the first six months of 2017, or more than triple what they had raised over the same period last year, according to Dealroom’s analysis.

That compares with €1.6 billion for their British-based counterparts during the six months through June 30, whose fundraising efforts declined by around 50 percent compared to the first half of 2016. German venture capital funds raised €1.3 billion, an 84 percent jump, over the same period.

British tech investors may be feeling the heat from Brexit. But the most recent declines, analysts and fund managers warn, may not solely be linked to Britain’s pending exit from the European Union.

Many of the country’s largest funds raised significant amounts of money last year, potentially skewing the sizeable declines in new investment over the first half of 2017 reflecting the pound's fall in value against the euro.

Others also question the ability of French and German venture capital — flush with so much new investment — to match the returns of their British counterparts as, traditionally, London-based funds have performed better than many of their Continental rivals.

Despite this squabbling over which European country has raised the most venture fundraising, the region remains in the shadow of the United States. In total, European venture capital still raised just half of the $13 billion that their American counterparts pocketed in the first half of the year.