Dhani Services Ltd.'s board of directors has approved a INR 1,200 crore equity fundraise—equivalent to a 9% ownership in the company—by way of a preferential issue of shares to General Catalyst and others.

The Silicon Valley-based investor, which has backed start-ups such as Stripe Inc. and Livongo, would invest INR 375 crore in Indiabull’s co-founder Sameer Gehlaut's fintech venture, with Gehlaut contributing an equivalent amount. Ribbit Capital, Think Investments, and First Royalty Ventures have recently joined the team.

According to a regulatory filing made on Wednesday, the funding will be subject to shareholder approval at an extraordinary general meeting scheduled for November 17.

Dhani is a transactional finance and primary healthcare platform. One Freedom Card, the company's primary product, gives clients instant credit as well as other perks including access to doctors, affordable medicines, instant cashbacks, and a free trading account. According to the company, there are over 30 lakh paid monthly subscribers and over 90 lakh monthly active users.

Gehlaut stepped down as executive chairman of Indiabulls Housing Finance NSE-0.14 % Ltd in August last year, after co-founding Indiabulls Group with two others 20 years ago and dividing it in 2014. After that, he became the CEO of Indiabulls Ventures NSE 0.74 %, which was later renamed Dhani Services. The organisation has a 3 crore-strong customer base spread across 500 Indian cities.

Dhani Services shares jumped 2.09 % to INR 216.90 on the BSE on Wednesday, while the benchmark Sensex fell 0.74 % to 61,259.96 points.