Alternative energy firm proves attractive to venture capitalists.

An Atlanta alternative energy firm has fueled up with $15 million from one of the country’s top venture capital firms, Silicon Valley-based Kleiner Perkins Caufield & Byers.

The startup, 18-month-old Sriya Innovations Inc., is shooting to become the largest “biorefinery” in the world. It hopes to use plant material such as wood chips and pine straw to make food ingredients, ethanol and biochemicals used in cleaning agents.

“Five years from now we want ... to be a $1 billion company,” Sriya chief Srinivas Kilambi said.

Named after Kilambi’s 4-year-old daughter, Sriya needs state and local incentives to commercialize the technology and build a pilot biorefinery plant.

Several states are courting the company with incentives, said Kilambi, a chemical engineer, serial entrepreneur and former exec at India-based conglomerate Reliance Industries Ltd.

“A couple of states want us to move our entire headquarters,” Kilambi said, declining to say which ones.

Georgia, so far, has not offered Sriya any economic incentives to locate the proposed plant in the state, he said.

Kleiner Perkins is actively investing in greentech innovation and entrepreneurs.

Kleiner Perkins’ $15 million is its second investment in Sriya — the Silicon Valley-based venture firm invested $6 million in the startup last year. Kleiner partners Ajit Nazre and Bill Joy, a co-founder of Sun Microsystems Inc. (Nasdaq: JAVA), are on Sriya’s board, according to an Oct. 22 filing with the Securities and Exchange Commission. An e-mail to the partners seeking an interview was not returned.

The $15 million should be sufficient to help build out the pilot plant — which is important for future fundraising, according to a source familiar with Sriya.

“If you can build a pilot plant and it works, you should be able to raise [additional] money,” said the source, requesting anonymity. “People want to see that functioning commercial plant.”

Clean tech ventures appear to be an investment darling. U.S. clean tech companies pocketed $1.7 billion in 71 financing rounds in the third quarter — accounting for 65 percent of the global total, according to the CleanTech Group LLC.

Venture capital firms “know that alternative energy is going to be big, they are throwing a lot of money at everything that looks like it could be viable, but I don’t think anyone knows who is going to win out,” said Mike Blake, managing director at Adams Capital, an Atlanta-based valuation firm.

Cheaper, faster

While alternative energy might be in the demand sweet spot, Sriya is in a business where survival hinges on the ability to scale quickly. And, with one of the big drivers of biofuel demand — oil prices — tumbling precipitously, enthusiasm for alternative fuels could wane, industry watchers say.

Sriya is in a relatively crowded field but is competing with a unique technology, said the source familiar with the company.