Grocery chain, Kroger, is reportedly in talks to acquire the wholesale startup, Boxed.com. According to sources familiar with the matter, the potential deal comes as the trend of people placing food orders online continues to grow and the competition with Amazon.com heats up.

The prospective deal, which arose as Boxed searched for funding, is likely to value the New York state based startup in the $325 million – $ 500 million range, as per a source who spoke on the condition of anonymity.

Boxed was founded in 2013, in the garage of current CEO Chieh Huang. The company started off as an online alternative to whole sale stores in the US like Costco, BJ’s, Sam’s Club etc and offers over 1600 different bulk goods ranging from toilet paper to potato chips. The company provides doorstep delivery to its customers.

Last year, Amazon acquired Whole Foods Market for a whopping $13.7 billion, thereby marking its entry into the US grocery market and in the process, created a sense of urgency among its rivals to counter the competition being presented by it. For instance, Target announced last month its intention to acquire the same day delivery platform, Shipt, in a $550 million deal.

In January 2016, Boxed raised $100 million and has been pushing into its own private brand in addition to its acquisition of a fast moving B2B unit for offices. The startup’s private label currently accounts for approximately 20% of its sales. The company has approximately a million users.

The Chief Executive Officer of Boxed, Chieh Huang, however, did not respond to an email request for a comment by CNBC while the spokeswoman for Kroger stated that the company in general declines to comment on rumours and speculation. The news regarding the possible deal was first reported by Forbes Magazine.

(Picture courtesy: Fordham News)