Expansion and acquisition by Knowledge Universe: 1998–2002 Other retailers such as FAO Schwarz, Walmart and Target later began carrying the toy. Toys 'R' Us became the first major retailer to carry the Phonics Desk shortly before Christmas 1995. The company received $800,000 in seed funding from friends, family, and former clients of Wood. That year, Wood resigned as a partner at Cooley LLP and founded LeapFrog Enterprises with Robert Lally.

Wood began manufacturing the Phonics Desk in 1995. Wood solicited feedback on his prototype from the late Robert Calfee, an expert on children's reading development and a professor of education at the Stanford Graduate School of Education. The prototype utilized a Texas Instruments chip that was previously used by one of Wood's clients to develop talking greeting cards. By 1994, Wood had developed the first prototype of what would become Phonics Desk, LeapFrog's first product. He began researching phonics and marketing while continuing as a partner at Cooley. The history of LeapFrog traces back to the late 1980s when LeapFrog founder Michael Wood, an attorney at Cooley LLP, had difficulties teaching his son how to read. John Barbour is the chief executive officer of LeapFrog. The company was founded by Michael Wood and Robert Lally in 1994. LeapFrog designs, develops, and markets technology-based learning products and related content for the education of children from infancy through grade school. (commonly known as LeapFrog) is an educational entertainment and electronics company based in Emeryville, California.

Leapfrog connect old version