
In a large bowl, toss the beef cubes with flour, salt, and pepper until evenly coated.
Heat olive oil in a large Dutch oven or pot over medium-high heat. Sear the beef in batches until browned on all sides. Remove the beef and set aside.
Add the chopped bacon to the pot and cook until crispy. Remove the bacon and set aside, leaving the rendered fat in the pot.
Add the onions and carrots to the pot and cook until softened, about 5-7 minutes. Add the garlic and cook for another minute until fragrant.
Pour in the red wine and beef broth, scraping up any browned bits from the bottom of the pot. Add the tomato paste, thyme, and bay leaf. Bring to a simmer.
Return the beef and bacon to the pot. Cover and simmer on low heat for at least 2-3 hours, or until the beef is very tender.
Add the mushrooms to the pot during the last 30 minutes of cooking. Season with salt and pepper to taste. Remove the bay leaf before serving.