Shares of vegan burger maker Beyond Meat rose more than 160 per cent during their US market debut, as investors look to cash in on the first publicly listed vegetable 'meat' company and the growing popularity of plant-based meat alternatives.

Key points: Beyond Meat priced its IPO at $25 a share but rose as high as $72 during its first day of trade

Beyond Meat priced its IPO at $25 a share but rose as high as $72 during its first day of trade Prominent investors in the company include Leonardo DiCaprio and Bill Gates

Prominent investors in the company include Leonardo DiCaprio and Bill Gates Beyond Meat is now valued at $3.8b even though it has warned investors it may never turn a profit

The stock opened at $US46 ($65), well above its IPO price of $US25. Shares surged minutes after starting to trade and were halted due to volatility. However, they rose even further when trade resumed and fetched as much as $US72 during the day, before closing at $US65.75.

Beyond Meat, which has warned it may never turn a profit, closed with a market capitalisation of around $US3.8 billion, based on shares outstanding, including underwriters' options.

Earlier on Tuesday, the company raised the size and price of its offering after increased demand from investors. The IPO raised $US240 million.

The money raised from the IPO gives Beyond Meat firepower to compete with other rivals in the increasingly crowded imitation meat market, such as Silicon Valley start-up Impossible Foods.

Beyond Meat founder and chief executive Ethan Brown told Reuters the proceeds would be used to expand marketing efforts, develop new products, establish production centres in Europe and Asia and open additional manufacturing facilities in the United States.

DiCaprio, Gates on Beyond Meat bandwagon

The Los Angeles-based company, which counts actor Leonardo DiCaprio and Microsoft Corp founder Bill Gates among its investors, aims to market its meatless burger patties and other products to meat-loving consumers.

It avoids terms such as vegan or vegetarian and instead displays its products in the meat section of supermarkets.

Plant-based substitutes for meat have been gaining in popularity as more people shift towards vegan or vegetarian diets, amid growing concerns about health risks from eating meat, animal welfare and the environmental hazards of intensive animal farming.

Beyond Meat creates substitutes for meat by using ingredients that mimic the composition of animal-based meat, mainly employing pea protein that looks and cooks like beef or chicken.

Currently, about 70 per cent of the company's revenues are generated by its flagship Beyond Burger patties.

The company also sells imitation sausages and vegan ground beef.

But Beyond Meat said it had struggled with production-capacity issues in the face of growing demand, and interruptions in the supply of pea protein, which it currently sources from two producers in Canada and France.

Sorry, this audio has expired Beyond Meat sizzles on the stock exchange, valued at $US3.8 billion after extraordinary IPO

"We're looking very much at not only expanding the number of pea protein providers but also getting into new types of protein," Mr Brown said.

The Beyond Meat CEO said protein blends, including from mung beans, brown rice and sunflower seeds, would not only offer pricing protection and supply-chain diversity, but also provide consumers with a variety of plant-based protein options.

Crowded marketplace

But Beyond Meat is not the only company vying for health-conscious consumers.

Tyson Foods, the No.1 US meat processor, owned a 6.5-per-cent stake in Beyond Meat, but last week said it sold its holding, as it looks to develop its own line of alternative-protein products.

Burger King and Impossible Foods last month started selling their vegan burger, Impossible Whopper, in 59 stores in and around St Louis, Missouri, with nationwide sales expected by the end of the year.

Beyond Meat began selling its plant-based burger at more than 1,100 US locations of fast-food chain Carl's Jr in January.

In 2018, $50 million of Beyond Meat's revenues came from retail sales, including at Amazon.com Inc's Whole Foods Market and Kroger Co supermarkets, while $37 million was generated at restaurants.

Mr Brown said the company planned to expand its network of restaurant and retail partners outside the United States, which currently account for 7 per cent of revenues, but declined to provide further details.

In 2018, Beyond Meat's net loss narrowed marginally to $29.89 million, from $30.38 million a year earlier. Net revenue more than doubled to $87.93 million in the same period.

Reuters