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The Web site for Tierra Patagonia, one of 4,000 Web sites powered by Buuteeq

The top three executives at Buuteeq all grew up in the heart of Silicon Valley, attending Palo Alto High School in the late 80s. Forest Key, Adam Brownstein and Cameron Steele still have plenty of roots in that tech Mecca. But when it came time to raise their latest round of funding, they found all of the support they needed in their new hometown of Seattle.

Buuteeq CEO Forest Key at the company’s Seattle office.

Buuteeq, an online marketing platform and content management system which powers the Web sites of more than 4,000 independent hotels across the globe, today is announcing a $10 million round from Seattle’s Madrona Venture Group and Redmond-based Concur Technologies.

Total funding in the 45-person company now stands at $17 million, with Key saying they’ll use the funds to expand internationally, possibly hiring up to 50 new employees in the next 12 months. The goal is to grow to “tens of thousands” of hotel customers in the coming years, he said.

As a result of the investment, Concur CEO Steve Singh and Madrona’s Tim Porter have joined the board of Buuteeq.

Despite relocating to Santa Barbara for a month in the summer and having options to raise cash in the Valley, Key said it felt good to “triple down” on Seattle.

“In the end, it was really nice to get this done with our home team advantage,” said Key, adding that Concur is a “world-class SaaS company” that’s respected in the industry.

Like Concur, Buuteeq charges customers a monthly fee to use its service, which includes everything from Web site creation tools to an online booking engine to SEO offerings. Hotel customers are spending on average about $3,000 per year via Buuteeq, with clients ranging from small bed and breakfasts like The Greenlake Guest House in Seattle to the new 500-room MGM Grand hotel in Vietnam.

The Maxwell Hotel in Seattle is using Buuteeq’s service to power its mobile and tablet experience.

Customers choose the cloud-based offering in part because it can help them better market to potential customers, creating a direct one-to-one relationship with hotel guests. Those relationships generate far more revenue for the hotels than selling rooms via channels such as Expedia, and, which often take a hefty slice of sales they generate. To illustrate the point, Buuteeq offers a ROI calculator on its Web site for hotel owners, showing how much incremental revenue they can earn by utilizing its system.

Because Buuteeq sits so close to the transaction, Key said there’s an enormous opportunity to grow subscription revenues.

“If someone is thinking about coming into Seattle, and they want a hotel that has easy access to the tourist destinations, we can help the hotel in downtown Seattle close more of those leads, more of those visitors and turn them into reservations direct to the hotel,” he said. “And, of course, because it is direct to the hotel, it is a retained margin, and they get to make more money on that reservation.”

Key draws comparisons between what Buuteeq is building for hotels, and what The Cobalt Group (sold to ADP) did for auto dealers and what DemandForce (sold to Intuit) did for dentists’ offices.

“I think we are part of a wave of systems that help small businesses be phenomenally good at marketing through digital mediums,” said Key, who uses the acronym DMS or digital marketing systems to describe the service.

Buuteeq’s next big bet will be on international expansion, a market where Key notes that roughly 80 percent of hotels are owned by independent operators. That compares to the U.S. market where 20 perent of hotels are considered independents. “More than 50 percent of our market opportunity is overseas,” he said. “If we are world-class in two years, it is really because we are world class.”

Buuteeq also is expanding rapidly into online advertising, a strategic area since some of the company’s earliest investors hail from online advertising giant aQuantive.

“We are already helping customers do advertising, and we are going to do a lot more there,” said Key. “So, (if), we know that people from France react to certain keywords when they are planning their Alaska vacations and coming to Seattle, we can optimize a campaign so that more French tourists going to Alaska stay in your hotel instead of your competitors. Those are insights that’s hard for a local Web agency … to know.”

Traditional Web design agencies still make up the biggest competition for Buuteeq, but Key said that hotel customers are quickly embracing cloud-based services which provide more flexibility. Web agencies charge upwards of $15,000 to $20,000 in which customers get a pretty “mediocre Web site” that’s not as flexible, said Key.

“We believe with cloud systems like ours, small businesses can start to do more as a do-it-yourself service with the power of the cloud,” said Key, adding that as the network of customers grow everyone benefits from the improvements and increased data culled by Buuteeq. “We can make the whole system better… Every new subscriber benefits the whole collection.”

Previously on GeekWireIn wake of Airbnb financing frenzy, Seattle super angels pump $3.5M into Buuteeq

[Editor’s note: GeekWire shares office space with Buuteeq at its Ballard world headquarters].

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