Mercury, a well-funded, three-year-old startup that offers a host of banking services to startups, is today rolling out a new offering for its customers: venture debt.

The idea is to loan out $200 million this year and up to $1 billion next year to startups that have already raised $2 million in funding from at least one institutional investor. The product is for early-stage startups only, with Mercury offering between 25% to 50% of a startup's equity round in debt.

The move puts the 250-person, San Francisco-based outfit -- which says it already has 60,000 businesses on its platform -- on a collision course with Silicon Valley Bank (SVB). Mercury co-founder and CEO Immad Akhund says that's very much the idea, too.

Like a lot of fintech startups, Mercury -- which is not a bank itself but a banking platform that offers FDIC-insured products through an Arkansas-based bank called Evolve Bank & Trust -- says bigger rivals like SVB are cumbersome and don't understand the changing expectations of its customers.

"These banks have just never had to build a product, so the idea that you go to a website, fill out a form and connect to QuickBooks is not something any bank would normally think of," Akhund says. "It seems obvious as a product entrepreneur, but that's just how these experiences are built at banks. Everything is still happening over email and PDFs. There are a ton of calls back and forth, a lot of Excel spreadsheets."

While a growing number of startups have begun securing debt nevertheless while either raising a round or soon afterward to extend their runway -- SVB says a whopping 63% of U.S. companies to go public in the first half of last year were customers -- Mercury's advantage over SVB is that it's a "product-first" startup, Akhund argues.

Akhund says he knows the pain points of startups well, having previously co-founded two earlier companies, including Heyzap, a mobile ad network that was acquired in 2016. Indeed, it's because of that firsthand experience, as well as his work with some of the hundreds of other startups to which he says he has written angel investor checks over the years, that Mercury was founded.