The name Agusta first rose to prominence in the early twentieth century, identifying a pioneer in the fledgling Italian aeronautics industry: count Giovanni Agusta. Originally from Sicily but living in Lombardy, Giovanni Agusta founded his company in 1907 at "Cascina Costa" in Samarate (Varese). Production of Agusta aircraft soared during the First World War, when the Count signed up as a volunteer in the Malpensa Air Battalion.
 
When he died in 1927, the company passed into the hands of his widow Giuseppina and son Domenico, who quickly found themselves having to deal with a crisis in the aeronautics sector and were forced to diversify to avoid shutting down. They decided to convert from aircraft to motorcycles, in response to the Italians' growing demand for motorised individual mobility. The first thing they did was come up with an engine which was inexpensive to produce and run: a two-stroke engine with a displacement of 98 cc and a three port timing system, primary gear transmission, an oil-bathed clutch and two gears.
Unfortunately the development of the engine was interrupted by the second world war, and in 1943 Cascina Costa was occupied by German troops. The occupation lasted until the end of the war, when Domenico Agusta established Meccanica Verghera in order to complete his new motorcycle project: a new company fully prepared to meet the challenges of the motorcycle market.