(Bloomberg) — The digital-health and advertising-technology sectors share a rich history of IPO disappointment, making this week’s planned debuts of physical therapy platform Hinge Health Inc. and TV ad software firm MNTN Inc. a test of whether the nascent recovery in the US first-time share sale market can keep going.

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Former initial public offering darlings such as SmileDirectClub, which shut down in 2023 after shares collapsed, and Teladoc Health Inc., whose stock is trading nearly two thirds below its listing price, offer cautionary tales. These wipeouts show the difficulty of technology startups aiming to make health-care cheaper and more efficient winning over investors. In the adtech sector, only a few companies — most notably Trade Desk Inc. — have found lasting success in a digital advertising landscape dominated by Alphabet Inc.’s Google.

Yet enticing valuations and insulation from trade conflict are helping Hinge Health and MNTN attract solid investor interest in their offerings, proving that, priced right, investors are willing to get behind listings from less-loved sectors.

“We’re seeing renewed IPO interest in sectors like digital health and adtech because they sit at the intersection of strong secular tailwinds and maturing business models,” said Mike Bellin, PwC’s US IPO leader.

“These companies are benefiting from increased demand for personalized, data-driven solutions and are now demonstrating the scale and profitability that public market investors are looking for,” Bellin said. “This activity reflects a broader shift in the IPO market — investors remain selective, but they’re ready to engage when the growth story is compelling and backed by fundamentals.”

Ahead of pricing later on Wednesday, both the Hinge Health and MNTN IPOs were multiple times oversubscribed, people familiar with the offerings have said. Hinge Health is guiding investors to price at the top end or above a marketed range, Bloomberg News reported earlier Wednesday.

Both deals are proving well-timed, with the recent broader market recovery and pullback in volatility measured by the VIX Index – Wall Street’s so-called fear gauge — falling below 20 in the past week before lurching back up on Wednesday. Other recent debuts have delivered meaningful post-IPO gains — a necessary precursor to greater activity levels.

Most notably, shares of CoreWeave Inc. have more than doubled since the AI data center operator went public in late March, salvaging what had seemed like a misfire of epic proportions when the size of the offering was cut and the stock initially traded underwater.

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Since then, only five companies raising more than $100 million, excluding blank-check companies, have gone public in the US as the tariff drama whipsawed markets. Yet all five are trading above their respective IPO prices, and the few names that have debuted in recent weeks have offered either little or no exposure to goods facing tariffs, or a preparedness not to press investors for top dollar.

“In light of the tariff, economic, inflation uncertainty, investors are focused on sectors and stories which are relatively protected from trade policy, demonstrate visible growth and reasonably valued,” said Stephane Gruffat, global head of equity capital markets syndicate at Deutsche Bank AG.

Hinge Health, which uses software and AI to automate musculoskeletal care for people experiencing chronic pain or recovering from surgery, would command a market capitalization of nearly $3 billion at the top of its IPO price range. This equates to about 7.6 times last year’s revenue of $390.4 million, according to Bloomberg calculations. Though Hinge Health lacks an ideal peer, the IPO values the company at a significantly lower revenue multiple than digital health companies such as Veeva Systems Inc. and Doximity Inc., as well as software firms concentrating on specific industries such as trades-focused ServiceTitan Inc. whose shares are up more than 70% since it went public in December.

Hinge Health is also set to list at a significantly lower valuation than the $6.2 billion figure implied by a 2021 funding round when the pandemic underscored the value of virtual health-care options.

Despite bringing the star power of creative director and movie star Ryan Reynolds, MNTN’s IPO values the 16-year-old company at a modest market cap of as much as $1.4 billion. That’s about six times trailing revenue of $226 million last year, well below the double-digit sales multiple of Trade Desk, which went public in 2016. Smaller adtech companies such as PubMatic Inc., Viant Technology Inc. and Magnite Inc. trade at comparatively modest trailing revenues multiples.

“Trade Desk does get a premium given its scale and track record so MNTN should trade at a discount,” said Rohit Kulkarni, Roth Capital Partners’ senior research analyst.

Still, MNTN’s 28% top-line growth in the first quarter of 2025 versus a year earlier, and the rapid growth of the streaming services it helps steer small and medium-sized businesses’ ad dollars towards, may convince investors to to treat it more like Trade Desk than other adtech firms.

“There was a time when adtech was immediately looked at with suspicion because of a long string of failures but Trade Desk helped mitigate that,” said Matt Kennedy, senior strategist at Renaissance Capital, a provider of pre-IPO research and IPO-focused ETFs.

“It’s not like digital health and adtech are working right now, and the most highly valued companies are still staying private as long as possible.”

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