Flipkart, the country’s largest home-grown e-commerce company, is slated to hit the road this quarter to raise a fresh round of capital, Mint reported this week. It hopes to raise at least $500 million and up to $1 billion, the report said citing unnamed sources. The report follows an earlier one in the Economic Times that said, also citing unnamed sources, that Walmart, the world’s largest retailer, is in talks to buy a stake in the Bengaluru-based company.

Any kind of fund-raising by Flipkart is always something of an event in India’s start-up market. There are many who will insist otherwise. Flipkart, they argue, is no longer the benchmark for either funding or valuations. A lot of venture capitalists I meet also frequently complain about the media’s “unhealthy obsession" with reporting on start-up fund-raising at the exclusion of everything else, thus turning all matters funding into an event.

But, here’s why start-up fund-raising and Flipkart’s in particular is so important.

Between 2007 and 2015, venture capital-backed companies in India raised more than $15 billion from a variety of investors including venture capital firms, hedge funds and strategic investors, according to data compiled by VCCEdge. Flipkart, which started up in 2007, alone accounts for over $3 billion or roughly 20% of the overall capital drawn during this period. It has raised that money at astounding valuations. When it last raised capital, $700 million in July last year, its valuation was reported at $15.2 billion. In July, India’s venture capital market was still riding an unprecedented valuation wave and Flipkart was its flag-bearer.

Things have changed since. The market has undergone a valuation correction. Again, Flipkart has led the way. Over the past few months, several foreign mutual funds that hold minority stakes in the company have successively marked down the value of their shares.

Last reported, the e-commerce company’s valuation was estimated at around $9-10 billion. With the e-commerce sector bellwether falling out of favour with investors, the valuations and fund-raising prospects of several others in the market have been impacted one way or the other.

The reported upcoming Flipkart fund-raising is interesting on two counts. One, the valuation at which it raises the next round of capital is going to influence future capital inflows into the e-commerce sector, the poster child of the ongoing start-up wave in the country.

It could raise $1 billion at a valuation of $9-10 billion or more or it may muster just $500 million at a drastically lower valuation. Either way, it will give the e-commerce company, which is desperately battling Seattle based e-tailing giant Amazon for market dominance here, the runway to still prove to its investors that it can deliver the goods. Two, Flipkart’s success in raising funds, hopefully at a more than decent valuation, equally extends the runway for India’s venture capitalists.

Also Read: The endgame for venture investing in India

After more than 10 years of continuous investing, the venture capital market is yet to deliver a single blockbuster exit. Most firms active here have raised and deployed successive funds over the years without much to show so far in terms of returning profits to their investors.

Let’s take a closer look at how much the top-rung firms currently manage between them. The 12 most active firms that invest from dedicated India funds have raised over $12 billion till date, based on data compiled from media reports and the websites of venture capital firms. Sequoia Capital India alone accounts for about $3 billion.

It raised a massive $920 million fund earlier this year. Second in the pecking order, in terms of size, is Nexus Venture Partners, which now has more than $1 billion in funds under management. Next is Matrix Partners India with $710 million, followed by SAIF Partners at $700 million. These 12 firms represent investors who invest across the seed and alphabet rounds (Series A, B and C).

Most of the capital they’ve raised has already been deployed, mostly in the consumer Internet sector.

The concern for these investors and in turn for the start-up market is bringing in the next $12 billion. It is true that most of these venture capital firms have enough capital in reserve to see them through the next 2-3 years.

But, after that the next tranche of funds will depend on a number of factors. How soon will the Indian start-up market begin to deliver supernormal returns on the investments that have been made so far? Will the flag-bearers of the current start-up wave go the distance and justify the investments made so far? How many among the 12 firms that have raised and deployed the $12 billion will survive?

These are questions that don’t have easy answers yet. The Indian venture capital market is still young and the best assets are yet to be created. For that, uninterrupted access to early stage funds is paramount. The obsession with funding, Flipkart and valuations is going to be around for a while. There will always be time later to talk about the other stuff.

Snigdha Sengupta is a consulting writer with Mint. She contributes stories on venture capital and private equity.