Financial technology, known as fintech, has been regarded as one of the most exciting growth areas when it comes to technology startups, attracting significant venture capital.

Delayed IPO Dreams

That level of interest may be over. One startup that went public, LendingClub Corp. (LC), described as an industry pioneer, saw the ouster of its CEO, Renaud Laplanche, due to disclosure problems. The revelation of the major issues that existed within this market leader helped worsen the problems of the online lending industry. Shares of LendingClub, along with another newly public company, On Deck Capital Inc. (ONDK), are down more than 50% this year.

So it may be no surprise that startup Social Finance Inc. (SoFi), which boasted last year that it was profitable and planned an IPO in spring of 2016, has announced its postponing pubic offering plans -- again. SoFi has been one of the poster children of fintech's potential with a value of $4 billion.

Building a Stronger Foundation

SoFI CEO Mike Cagney says the online lender has pushed back IPO plans to focus on building out other business lines. SoFi also is working to close out a new $500 million funding round. The online lending company has been working to both sell its loans to international investors, which may lead them to take an equity stake in the company. (See also: How Tech Startup SoFi Plans to Disrupt the Banking Industry)

Industry Headwinds

There's no doubt that SoFi's prospects for an IPO have been hurt by broader problems in the online lending market, illustrated by Lending Club and On Deck Capital. "Lending Club and On Deck were the two pioneers in the marketplace to go public and those stocks haven't worked," said Bob Ramsey, who works for web-based investment bank FBR & Co (FBRC). "That does mean investor appetite is muted."

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