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The band's second album, Panic, was released on 5 March 2012.

On 3 October 2011, the band released an EP titled Clash, featuring two new songs and four remixes of them. The band released their second official single, 'Suzy', on 24 February 2009. The album performed best in the band's native France where it attained a peak position of 11 in August 2009, and remained on the French albums chart for 68 consecutive weeks. In Switzerland, the album reached number 72 and in Belgium it achieved a position of 42. The album received praise for its traditional jazz inclinations, and placed in a number of European albums charts. On 20 October 2008 the self-titled Caravan Palace was released, preceded by the single 'Jolie Coquine'. They spent the next year recording material for their debut studio album. Following this emergence, the group were signed by the Paris-based Wagram Music record label. From 2006 to 2007 they spent a year touring around France, and their first festival appearance came at the Django Reinhardt Jazz Festival in 2007. The band became popular on the internet after releasing a number of demos and promo singles. More performers were required for the live concerts and the other three current band members were found after searching on MySpace.

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LoГЇc Barrouk took an interest in the project and booked the band a recording studio and a series of gigs. The band formed as a three-piece when they were recruited to compose the soundtrack for a silent adult film.