A compact electron source specifically designed for time-resolved diffraction studies of free-standing thin films and monolayers is presented here. The sensitivity to thin samples is achieved by extending the established technique of ultrafast electron diffraction to the "medium" energy regime (1-10 kV). An extremely compact design, in combination with low bunch charges, allows for high quality diffraction in a lensless geometry. The measured and simulated characteristics of the experimental system reveal sub-picosecond temporal resolution, while demonstrating the ability to produce high quality diffraction patterns from atomically thin samples.