Preheat the oven to 325°F.
Pat the beef dry and season with salt and pepper. Set aside.
In a large Dutch oven over medium heat, cook the pancetta or bacon until crisp. Use a slotted spoon to transfer it to a plate, leaving the fat in the pot.
Add 1 tablespoon olive oil and turn the heat to medium-high. Working in batches so the pot isn’t crowded, sear the beef on all sides in the pancetta fat, adding more olive oil as needed. Transfer the seared beef to the plate with the pancetta.
If the pot looks dry, add 1 tablespoon olive oil. Sauté the diced fennel, diced onion, and thyme until the onions have softened, about 5 to 7 minutes.
Stir in the garlic and tomato paste. Cook until the paste darkens to a brick red.
Sprinkle the flour over the vegetables and stir to coat. Cook for about 1 minute.
Slowly pour in the red wine, scraping up any browned bits from the bottom of the pot. Bring to a simmer for about 3-4 minutes.
Add the beef broth, bay leaves, seared beef and pancetta (with any juices from the plate), beets, and potatoes. Stir to combine.
Bring to a simmer, then cover and transfer to the oven. Cook for about 2½ hours, until the beef is fork-tender.
About 30 minutes before the stew is done, heat 1 tablespoon olive oil in a skillet. Sauté the mushrooms and pearl onions with a pinch of salt and pepper until browned and just tender. Use a tablespoon or two of water to deglaze the pan to get up all the brown bits.
Stir the mushrooms and pearl onions into the stew. Return the pot to the oven, uncovered, for the remaining 20 to 30 minutes so the sauce reduces slightly.
Discard the bay leaves. Taste and adjust the seasoning with salt and pepper.
Serve with some fresh parsley, butter noodles or crusty bread.