Step 1

In a large pot, heat the olive oil over medium heat. Add 1 cup of the chopped onions, and sauté until translucent and slightly browned, 3-4 minutes. Add garlic, and cook, stirring constantly for a minute or so.

Step 2

Add beef, and cook, breaking into small pieces, until it is no longer pink, 6-7 minutes. Drain excess grease.

Step 3

In a blender or food processor, blend remaining 1 cup onion and the red pepper until smooth. Pour the mixture into the pot with the beef and onions.

Step 4

Add the tomato paste, salt, pepper, oregano, basil and thyme, and cook for 1 minute, stirring until combined.

Step 5

Add diced tomatoes, crushed tomatoes, mushrooms (if using), beef broth, and sugar. Stir until combined before adding the bay leaves.

Step 6

Bring the sauce to a boil, and then reduce to low and simmer for 1 hour, stirring occasionally. Stir in the balsamic vinegar and let the sauce rest for 10-15 minutes (for the flavor to absorb) before serving.