Fraud protection service firm Iovation on Thursday said it capped a $15 million funding round with a $5 million investment from SAP Ventures and European Founders. The initial $10 million investment was made by Intel Capital.

The funding is the latest in a string of investments in the increasingly specialized security market where both good and bad guys are using very sophisticated technology to either boost or breach corporate network defenses.

Portland Oregon-based Iovation markets a hosted service which tracks and identifies the devices used by people to commit online fraud on commercial sites or to harass users of social networking and dating sites.

By identifying suspect computer devices, the technology reduces the ability of fraudsters to mask their identities with new names and email addresses etc.

The company also creates a database of suspect devices gleaned from each of its customers which is then shared among all of Iovation's customers.

"This allows them to create a network which becomes more and more valuable to its subscribers and that database is shared across industries," said Andreas Weiskam, a partner with SAP Ventures. "That creates a barrier to entry for new competitors in the space."

The security sector is becoming increasingly specialized as more sophisticated network breaches come to light, and the sector is benefiting from growing security concerns among businesses and law enforcement.

Last month e-mail security firm Proofpoint said it raised $28 million. Last year two e-mail security firms IronPort and Postini were acquired for $830 million and $625 million respectively.

In January Aveksa, a compliance management security firm scored $12 million, while in February Coverity, a security firm that markets code-testing tools took $22 million.

"It's a very diverse market. Organizations have to assess their risk and pick the best mix of solutions to manage fraud and abuse and we hope we are part of that mix," said Greg Pierson, CEO of Iovation.

The company, which plans to explore joint business opportunities with both Intel and SAP, will use its new cash infusion for R&D and sales.