Many living organisms in terrestrial and aquatic ecosystems rely on multiple reproductive strategies to reduce the risks of extinction in variable environments. Examples are provided by the polyp stage of several bloom-forming jellyfish species, which can reproduce asexually using different "budding" strategies. These strategies broadly fall into three categories: 1) fast localized reproduction, 2) dormant cysts, or 3) motile and dispersing buds. Similar functional strategies are also present in other groups of species. However, mechanisms leading to the evolution of this rich reproductive diversity are yet to be clarified. Here we propose an evolutionary model for jellyfish polyps and determine how local population extinction and unequal fitness of the three modes can drive the evolution of multiple reproductive strategies. Depending on environmental parameters, we find that evolution leads to a unique evolutionary stable strategy, where in general multiple reproductive modes coexist. As the extinction risk increases, this strategy shifts from a pure budding mode to a dual strategy, and finally to one characterized by allocation into all three modes. We determine the existence of relative fitness-dependent thresholds in extinction risk where these transitions can occur and discuss our predictions in light of observations on polyp reproduction in laboratory and natural systems.