Preheat your oven to 325°F (160°C). In a large Dutch oven or oven-safe pot, cook the bacon over medium heat until crispy. Remove the bacon and set aside, reserving the rendered fat in the pot.
Season the beef cubes generously with salt and pepper. In batches, sear the beef in the bacon fat until browned on all sides. Remove the beef and set aside.
Add the chopped onion and carrots to the pot and cook until softened, about 5-7 minutes. Add the minced garlic and cook for another minute until fragrant.
Stir in the tomato paste and cook for 1-2 minutes. Pour in the red wine, scraping up any browned bits from the bottom of the pot. Bring to a simmer and cook for 5 minutes to reduce the alcohol.
Return the beef and bacon to the pot. Add the beef broth, thyme sprigs, and bay leaf. Bring to a simmer, then cover the pot and transfer it to the preheated oven.
Braise in the oven for 3-3.5 hours, or until the beef is very tender. About 30 minutes before the end of cooking time, sauté the sliced mushrooms in a separate pan with butter until browned. Add the sautéed mushrooms to the stew.
Remove the stew from the oven and let it rest for 10-15 minutes before serving. Garnish with fresh parsley, if desired. Serve hot with mashed potatoes, egg noodles, or crusty bread.
