Reproduction is one of the requirements for evolution and a defining feature of life. Yet, across the tree of life, organisms reproduce in many different ways. Groups of cells (e.g., multicellular organisms, colonial microbes, or multispecies biofilms) divide by releasing propagules that can be single-celled or multicellular. What conditions determine the number and size of reproductive propagules? In multicellular organisms, existing theory suggests that single-cell propagules prevent the accumulation of deleterious mutations (e.g., cheaters). However, groups of cells, such as biofilms, sometimes contain multiple metabolically interdependent species. This creates a reproductive dilemma: small daughter groups, which prevent the accumulation of cheaters, are also unlikely to contain the species diversity that is required for ecological success. Here, we developed an individual-based, multilevel selection model to investigate how such multi-species groups can resolve this dilemma. By tracking the dynamics of groups of cells that reproduce by fragmenting into smaller groups, we identified fragmentation modes that can maintain cooperative interactions. We systematically varied the fragmentation mode and calculated the maximum mutation rate that communities can withstand before being driven to extinction by the accumulation of cheaters. We find that for groups consisting of a single species, the optimal fragmentation mode consists of releasing single-cell propagules. For multi-species groups we find various optimal strategies. With migration between groups, single-cell propagules are favored. Without migration, larger propagules sizes are optimal; in this case, group-size dependent fissioning rates can prevent the accumulation of cheaters. Our work shows that multi-species groups can evolve reproductive strategies that allow them to maintain cooperative interactions.