Intel Capital on Thursday said it was the primary investor in a $15 million funding of Iovation, a three-year-old fraud-protection service startup. Intel put in $10 million.

Security startups have been attracting a lot of attention lately both in terms of funding and acquisition in part because online fraudsters are becoming better organized and more resourceful, according to an analyst.

Cisco Systems alone has spent almost a billion dollars on two security firms it acquired in 2007. (see Cisco-IronPort: Startup Insecurity and Cisco Grabs Securent for $100M)

“The degree of sophistication has taken a qualitative step upwards from where it used to be,” said Geoffrey Turner, an analyst with Forrester Research.

The days of high-profile hackers such as Kevin Mitnick, who was convicted of computer hacking in the 1990’s, are long over, Mr. Turner said.

Online fraud is now being perpetrated by specialized groups. One group collects stolen IDs and sells the data to another group that then uses the data to steal money or goods, he said.

“Given the transient nature of a lot of this, it is impossible for law enforcement to track it down, which leaves the task up to commercial entities,” Mr. Turner said.

A lot of security firms offer products and services that protect the perimeter of the corporate networks, but because the attacks are becoming more complex, companies are looking beyond authentication for protection.

Portland, Oregon-based Iovation goes on the offensive to some extent. The company offers a service where the devices being used by both good guys and bad guys are identified.

So companies have another means, beyond password authentication, of identifying whether the person seeking to perform a transaction is a customer or someone perpetrating a fraud.

“We can identify the device and associate it with all of the accounts and transactions that occur through that device at all of our subscriber sites,” said Greg Pierson, CEO of Iovation.

And over time the millions of devices establish a positive or negative reputation that Iovation shares with all of its commercial subscribers, which could be anything from a bank to a social-networking site.

For Intel, the investment is designed to help its core business of selling PC chips.

"This is about supporting the movement toward good online user experiences and to push the boundaries of e-commerce and other legitimate online activities," said Robert Rueckert, a senior investment manager at Intel Capital.