Tel Aviv-based Flytrex’s drones will fly more than 2.5 kilometers (1.6 mile) across a large bay that separates two parts of the city, delivering for online marketplace Aha, company Chief Executive Officer Yariv Bash said in an interview.

The drones will drop off the goods at a designated landing pad where they will then be taken to their final destination by foot, scooter or car. The companies hope to receive regulatory approval by the end of the year to transport orders straight to customers’ backyards.

“Drone-based disruption is only taking off, with Iceland as its runway,” Bash said separately in a statement.

Using drones will save Aha 60 percent of delivery costs to that area of Reykjavik, where it serves 8,000 customers, he said. Currently the drones make up to 10 deliveries a day, and will double the number by the end of next week.

Some heavy-hitters are working on developing drone delivery, including Amazon.com Inc. and Google parent Alphabet Inc. Airbus SE, the European aerospace conglomerate, is starting a company to provide unmanned aerial services as well, estimating in May that the field could increase to more than $120 billion annually as the use of such fleets expands.

Amazon in December made its first-ever drone delivery — a television streaming device and a bag of popcorn — to a customer in the U.K., where the company is testing the technology, in part because of strict U.S. regulations. 7-Eleven and Domino’s have used Flirtey drones to deliver packages, and Zipline flies unmanned aircraft to parachute medical supplies to remote African villages.

Bash, who previously headed SpaceIL, an Israeli nonprofit aiming to land the first Israeli spacecraft on the moon, doesn’t see Amazon.com Inc. as a competitor. “Amazon serves Amazon customers,” he said in a phone interview. “That leaves the rest of the market open for other drone companies.”

The Israeli company is carrying out trial deliveries in countries other than Iceland, and has regulatory approval in one nation to do backyard drop-offs, said Bash, declining to elaborate.

Flytrex has raised $2.5 million from angel investors including Swiss venture capitalist Daniel Gutenberg, who also invested in Mobileye, the maker of software for driverless cars acquired by Intel Corp. earlier this year for $15 billion. It plans another financing round in the next few months, Bash said.