Henrich Focke was ousted in 1936 from the Focke-Wulf company, which he had cofounded in 1924, due to shareholder pressure. The ostensible reason for his ouster was that he was considered "politically unreliable" by the Nazi regime. There is reason to believe, however, that Focke's removal was to allow Focke-Wulf's manufacturing capacity to be used to produce Bf 109 aircraft. The company was taken over by AEG, but soon after this the Air Ministry, which had been impressed by the Focke-Wulf Fw 61 helicopter, suggested that Focke establish a new company dedicated to helicopter development and issued him with a requirement for an improved design capable of carrying a 700 kg (1,500 lb) payload.
Focke established the Focke-Achgelis company on 27 April 1937 in partnership with pilot Gerd Achgelis, and began development work at Delmenhorst in 1938.