Monzo, one of Britain’s most prominent standalone digital banks, is in detailed talks to raise hundreds of millions of pounds at a sharply higher valuation despite a string of setbacks which have included curtailing its expansion in the US.

The company is in discussions with a number of investors about raising at least £300m in new funding, Sky News revealed on Tuesday evening.

Approximately £200m is expected to be provided by new shareholders, with the remainder coming from existing backers of the company.

A £3bn valuation would reflect substantial growth in Monzo’s revenues, according to one source close to the process, and would be almost three times the £1.1bn valuation achieved in its last capital-raising earlier this year.

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That may surprise industry peers given Monzo’s decision to withdraw its application for a full US banking licence earlier this year amid regulatory uncertainty.

In recent months, it has launched a service enabling customers to make card payments in instalments, in an attempt to gatecrash the ‘buy now, pay later’ revolution which has propelled the valuations of companies such as Klarna to stratospheric levels.

The company is chaired by Gary Hoffman, whose other principal job is chairing the English Premier League.

Even at a £3bn valuation, Monzo would still be worth far less than some fintech rivals, including Klarna and Revolut, which this year become the UK’s most valuable technology company.

FT Partners, a US-based advisory firm, is working with Monzo on the funding round.

Monzo declined to comment.

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