We have only been shown one means of Kaiju reproduction: the After-beasts, or Yoju. The Yoju are produced asexually by specialized organs (as far as we know) and are typically direct copies or of the same ‘kind’ as the base kaiju who made them. The Kaiju no. 9 can only make other mushroom kaiju, for example, even if they aren’t identical to him.
The issue with asexual reproduction though, is its lack of diversity from generation to generation. The only way ‘new’ genetic information is introduced in such cases is through mutation (which will happen regardless) or occasional sexual reproduction. Seeing as Kaiju seemingly lack the bits and bobs needed for the second one in their regular bodies, only those kaiju who could transform into humans would be able to reproduce sexually.
So, why would they do that? Hoshina says "My family lineage is a clan of monster subjugators dating back from the Muromachi Period" in Chapter 14. For reference, the Muromachi Period was between 1336-1573, meaning that Hoshina's family (and presumably the rest of humanity) has been fighting Kaiju for 447 years at a minimum, and have been fighting well enough that an entire family's livelihood could be based on hunting Kaiju. If humanity is good at anything, it's killing things and inventing the means to be even more efficient at killing things. Reno even backs this up by thinking "Hibino is the first monster to get away since the Defense Force was founded." in Chapter 3
So it's possible that Kaiju have reached the point where they're at risk of going extinct. Humanity has gotten too good at hunting them, so the Kaiju (perhaps for the very first time) are taking a page out of humanity's book and starting to work together, and recruiting new blood by sending out the Dragonfly Kaiju to awaken hybrids like Kafka.
Kaiju no. 9 even says at one point "Retreating empty handed like this, is a bit... I should at least take a sample of a living troop member back with me." in Chapter 15, Implying there is someone, or a group of someones, who would be interested in finding out what makes members of the Defense Force tick.
Given that Kaiju no. 9 doesn't even understand phones all that well, the Kaiju might be mistakenly assuming that troop members are a special breed of human, rather than their suits being the source of their abilities. We also know that the Kaiju no. 9's main objective when attacking the base during the recruitment test was specifically to kill troop members, presumably to lower their numbers and weaken the Defense Force as a whole and test their defenses. The Kaiju are getting ready for a large scale attack.
A war is coming, and people like Kafka are going to be trapped in the middle of it.
