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Milkbasket, a Gurugram-based micro-delivery startup, is in talks to close a new financing round as it looks to expand its footprints in milk, groceries, fruits, and vegetables delivery market that has attracted the attention of many in recent months including Amazon India.

The four-year-old startup is in advanced stages of talks with private equity funds to raise more than $50 million, people familiar with the matter told TechCrunch. The round, Series C, is likely to close within the next two months, they said. A spokesperson of Milkbasket, which has raised $26 million to date, declined to comment.

Milkbasket, which operates in Bangalore, Gurugram, Noida, and Ghaziabad, and Hyderabad, allows users to order their daily supplies until midnight and delivers it in the early morning hours. It has also started a subscription service for users who need the same set of items delivered to them everyday.

In a recent interview with Indian newspaper Economic Times (paywalled), the startup executives said they are not trying to get items instantly to customers but focus on recurring supplies that need to reach people’s doorsteps at certain hours of the day, thereby mimicking how a traditional milkman and paperboy operate to lower delivery costs.

The startup, which focused on just delivering milk in its early years, is increasingly exploring new categories to enter, and might soon begin delivering prescribed medicine in some cities, one of the people said. Milk delivery is now a small portion of the startup’s business.

It competes with BigBasket and Grofers, both of which are heavily backed and locked in a fierce battle to gain market share. Many more startups are entering micro-delivery territory. Naspers and Tencent-backed Swiggy launched a new service called “Go” yesterday that will enable people in Bangalore to have anything delivered to them.

Google-backed Dunzo is also increasingly gaining popularity and slowly expanding to more cities across India. FreshToHome, a startup that delivers meat and vegetables, recently started to offer milk delivery in select places.

Last month, Amazon launched Fresh to offer fresh fruits and vegetables in parts of Bangalore. The company is increasingly expanding its fulfilment centers across the nation to offer its customers a wider selection of items, Siddharth Nambiar, Director of Prime Now in India, told TechCrunch in a recent interview.

The foods and grocery market is growing in India. According to some estimates, it will reach $869 billion in sales in 2023, with digital-based services seen as an important vector for growth.