Social Finance Inc. is taking it slow after a rough year for financial technology companies.
The San Francisco online lending company known as SoFi, which specializes in refinancing student loans, is pushing back plans for an initial public offering in order to focus on developing other business lines, said CEO Mike Cagney. Meanwhile, the company hasn’t yet closed a $500 million funding round, an effort that has SoFi courting international investors to purchase loans and potentially take an equity stake at the same time.
The industry has been challenged this year by slower growth and waning venture funding for financial technology startups. A decline in public market valuations of online lenders isn’t encouraging for a SoFi IPO, Cagney said in an interview.
“In any industry, it’s a trying time when the market is not receptive or interested in that type of business model,” said Bob Ramsey, an analyst at FBR Capital Markets.
Cagney said in May 2015 that the company would likely go public within the next 12 months. Nineteen months later, it hasn’t and has no intention of doing so anytime soon. That’s mostly because SoFi’s newer business lines are still evolving and the company plans to add more financial products, Cagney said. Plus, it isn’t ready to undergo the scrutiny by investors that public companies face every quarter, he said. As newer offerings like wealth management and life insurance are being developed, the startup sometimes has to…