Progress in low emittance electron storage ring design necessitates an upgrade of the Swiss Light Source (SLS) in order to stay competitive in the next 20 years. It is planned to replace the storage ring by a new one providing 20–50 times lower emittance, while keeping building, beam lines and injector. Emittance reduction is challenged by the comparatively small circumference of the machine, but a new type of star-shaped multi-bend achromat based on longitudinal gradient bends and negative bends (anti-bends) provides low emittance at moderate focusing in a compact lattice. The concept is described, a first baseline lattice is presented, and the challenges and achievements in critical fields of beam dynamics and technology are briefly reported.