Online powerhouse The Hut Group is in talks with potential investors about a sale of shares that could value it at as much as £4bn.

The Hut Group, which sells categories including health and beauty and provides other businesses with digital platform services, could opt for an IPO or private investment, Sky News reported.

The Hut Group has held conversations with possible investors including a Singaporean sovereign wealth fund, Baillie Gifford, Capital Research Group, Dragoneer Investments and TSG Consumer, according to the broadcaster.

Bringing new investors on board would allow early backers, such as private-equity house KKR and venture-capital specialist Balderton Capital, to realise their investments at a high premium.

The Hut Group, which was founded in 2004 by entrepreneurs Matthew Moulding and John Gallemore, has grown strongly and last year generated sales of more than £1bn.

Shore Capital analyst Greg Lawless said he would “watch developments with interest” at the group, and that “institutional equity investors will no doubt be reflecting upon the merits or otherwise of the private equity sale”.

He said: “The Hut Group has been frequently tipped to potentially float throughout its 16-year history. On previous occasions, it has raised funds from private investors and counts BlackRock and Merian Global Investors as current shareholders.”