Preheat your Dutch oven over medium heat. Add diced bacon and let it cook until crispy and golden, about 8-10 minutes. Remove and set aside, leaving the fat in the pot.

Pat the beef dry, season with salt and pepper, and brown in batches in the hot bacon fat for 12-15 minutes. Set aside with bacon.

In the same pot, add sliced onions and carrots; cook until softened (about 8 minutes). Stir in tomato paste and minced garlic; cook for 1 more minute.

Sprinkle in the flour, stirring well for 2 minutes to combine and thicken the sauce.

Gradually pour in the wine, scraping the bottom of the pot, and simmer for about 5 minutes.

Add beef broth, thyme, and bay leaves; return the beef and bacon, ensuring liquid covers the meat.

Cover and simmer, then braise in a preheated oven at 325°F for 2 to 2½ hours.

In the last hour, sauté pearl onions and mushrooms until golden (10-15 minutes).

Once the beef is tender, fold in the sautéed onions and mushrooms. Rest for at least 15 minutes before serving.