Dive Brief:

• SecureWorks Corp., a cybersecurity firm owned by Dell Inc., plans to launch its IPO this month, according to a report from the Wall Street Journal. 
• If the plans come through, SecureWorks would be the first tech IPO of 2016. No other tech firms have listed shares in the U.S. since a Chinese firm did in December. 
• SecureWorks helps businesses lock down their systems and check for intruders. In the potential IPO, the company will only offer a small portion of itself to investors in light of the tough market, according to the report. 

Dive Insight:

The first quarter of 2016 was one of the slowest on record for IPOs, with only nine deals, none of which were tech-related.

One concern about the potential deal is that SecureWorks doesn’t currently make a profit. The Dell-owned company generated $339.5 million in revenue last fiscal year, up 30% from the year prior, according to a securities filing. But its net loss of $72.4 million was nearly twice as high over the same period.

There has been widespread concern that many private tech companies are overvalued, particularly cybersecurity companies. In recent months cybersecurity firms including Imperva, Fortinet and FireEye Inc. have suffered in the stock market. Analysts say high-profile data breaches drove security spending up in 2015, making cybersecurity company valuations too high. As a result, many cybersecurity firms have recently seen their valuations plummet.

The cybersecurity field is expensive and changing rapidly. In January, FireEye purchased threat intelligence firm iSight Partners for $200 million. Reuters reported that iSight CEO John Watters was aiming for a $1 billion valuation when he talked last year about a potential IPO in 2016. Now, the deal is worth just one-fifth of that hoped-for valuation.