diff --git a/peer/state-clientinit.go b/peer/state-clientinit.go
index 8d963bc..8ced222 100644
--- a/peer/state-clientinit.go
+++ b/peer/state-clientinit.go
@@ -75,13 +75,22 @@ func (s *stateClientInit) onInit(msg controlMsg[packetInit]) peerState {
 }
 
 func (s *stateClientInit) onPing() peerState {
-	if time.Since(s.startedAt) > timeoutInterval {
-		s.logf("Init timeout. Assuming version 1.")
-		return enterStateClient(s.peerData)
+	if time.Since(s.startedAt) < timeoutInterval {
+		s.sendInit()
+		return s
 	}
 
-	s.sendInit()
-	return s
+	if s.staged.Direct {
+		s.staged.Direct = false
+		s.publish(s.staged)
+		s.startedAt = time.Now()
+		s.sendInit()
+		s.logf("Direct connection failed. Attempting indirect connection.")
+		return s
+	}
+
+	s.logf("Timeout.")
+	return initPeerState(s.peerData, s.peer)
 }
 
 func (s *stateClientInit) sendInit() {
diff --git a/peer/state-clientinit_test.go b/peer/state-clientinit_test.go
index 87cdc8b..fc910a5 100644
--- a/peer/state-clientinit_test.go
+++ b/peer/state-clientinit_test.go
@@ -56,11 +56,20 @@ func TestPeerState_ClientInit_onPingTimeout(t *testing.T) {
 
 	state := assertType[*stateClientInit](t, h.State)
 	state.startedAt = time.Now().Add(-2 * timeoutInterval)
+	assertEqual(t, state.staged.Direct, true)
 
 	h.OnPingTimer()
 
-	// Should have moved into the client state due to timeout.
-	assertType[*stateClient](t, h.State)
+	// Should now try indirect connection.
+	state = assertType[*stateClientInit](t, h.State)
+	assertEqual(t, state.staged.Direct, false)
+
+	// Should re-initialize the peer after another timeout, so should be direct
+	// again.
+	state.startedAt = time.Now().Add(-2 * timeoutInterval)
+	h.OnPingTimer()
+
+	assertEqual(t, state.staged.Direct, true)
 }
 
 func TestPeerState_ClientInit_onPeerUpdate(t *testing.T) {